Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BIRMINGHAM CITY COUNCIL BILL (By Order)

Order for further consideration, as amended, read.

To be further considered upon Thursday 4 July at Seven o' clock.

BRITISH RAILWAYS (TROWSE BRIDGE) BILL [Lords] (By Order)

YORKSHIRE WATER AUTHORITY BILL (By Order)

BERKSHIRE BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time upon Tuesday 2 July.

SHETLAND ISLANDS COUNCIL (OMNIBUS SERVICES) ORDER CONFIRMATION

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Shetland Islands Council (Omnibus Services); And the same was read the First time; and ordered to be considered upon Wednesday 3 July and to be printed. [Bill 177.]

Oral Answers to Questions — NATIONAL FINANCE

Privatisation

Mr. Hardy: asked the Chancellor of the Exchequer what estimate he has made of the net receipts from the privatisation of public assets during the next two years.

The Financial Secretary to the Treasury (Mr. John Moore): The 1985 public expenditure White Paper assumed that net receipts from special sales of assets would amount to £4·5 billion over the next two years. Receipts from council house sales would add about a further £4 billion.

Mr. Hardy: Will the Financial Secretary confirm that those substantial sums will be devoted largely to the relief of income tax, providing significent benefit only to a minority of the population and small parts of the country? Does he accept that that destruction of capital assets should best be described as treasonably feckless?

Mr. Moore: As opposed to the hon. Gentleman's comments, he will know that the privatisation programme sees as its main goal an attempt both to improve the efficiency of the economy and to benefit the consumers

and the workers in those enterprises from the increased profitability and efficiency of the structures for which they work.

Mrs. Virginia Bottomley: Does my hon. Friend agree that the privatisation measure that has most dramatically affected more than 750,000 people has been the opportunity to buy one's own home, which has been offered to council house and other tenants by the Government?

Mr. Moore: My hon. Friend is right, and I should like to update her on the figures, which are better than she thought. As at March 1985, 850,000 council houses have been sold, and that number of people are happily the owners of their own homes.

Mr. Carter-Jones: When the Minister has sold off the royal ordnance factories, and paid back all the money owed in pensions, will anything be left for tax relief?

Mr. Moore: What we have instead are enterprises which serve consumers, employees and the nation more efficiently. I wonder what the hon. Gentleman will do at the general election when, I assume, he presents the Labour party's wholesale commitment to the re-nationalisation of all those prime industries, which will be the best imaginable boon for the Conservative party.

Mr. Leigh: Is my hon. Friend aware that, contrary to what the hon. Member for Wentworth (Mr. Hardy) claims, in an average constituency, such as Brecon and Radnor, no fewer than 3,000 householders will have benefited from the sale of British Telecom shares, 1,000 householders will have benefited from the sale of council homes, and many hundreds from the sale of nationalised industries, which we have brought back to real public control?

Mr. Moore: I am delighted that my hon. Friend, in an electoral sense, brings us back to the realities of Brecon and Radnor. Beyond his specific points, the consumer, the nation and the workers will all benefit from privatisation.

Mr. Blair: Do the Financial Secretary's figures include the money that will be raised by the sale of British Gas? Is it not the case that for the Government to retain the last vestiges of their economic credibility they propose to flog off British Gas as a private monopoly to bump up prices and to fund the tax cuts before the election? Is it not, therefore, right that in the Government's eyes privatisation is no longer a virtue, but a necessity?

Mr. Moore: The figures are precisely as I referred to them — those in the 1985 public expenditure White Paper. I am intrigued that so far the official Opposition have not yet referred in the House to their policy on the re-nationalisation of British Gas. The only reference that I can find is in the overseas service of the British Broadcasting Corporation, when the right hon. Member for Salford, East (Mr. Orme) committed the Opposition to re-nationalisation. To the extent that the Opposition seem unwilling to admit their policy, the Government's policy on the issue is clear.

Share Ownership

Mr. Favell: asked the Chancellor of the Exchequer what effects on share ownership he expects from the phasing out of the state earnings-related pensions scheme.

The Chancellor of the Exchequer (Mr. Nigel Lawson): The emphasis given to wider share ownership


in the Government's privatisation programme, coupled with changes in the tax system, have already probably doubled the number of individual shareholders in Britain since we first took office in 1979. The proposals to phase out the state earnings-related pension scheme will encourage the spread of personal pensions and give many more people the opportunity to take a direct interest in the way their pension savings are invested.

Mr. Favell: Do I understand from my right hon. Friend's answer that he considers that the phasing-out of the scheme will help him in his drive to create a property-owning democracy, and that this goes a long way to explaining the Labour party's opposition to it?

Mr. Lawson: My hon. Friend is right. It is all part of the policy which my hon. Friend the Financial Secretary outlined in answer to the previous question, and which I set out at some length in the Maurice Macmillan memorial lecture a few days ago. It is striking to note that all that the Opposition can do is to say that they will grab back all the shares that the employees of the nationalised industries have taken. Moreover, they will do so at a confiscatory price.

Mr. Ashley: Is it not true that the effect on shares of the ending of SERPS is trivial compared with the effect on the real economy? Do the Government intend that pensioners in the next century should have the same share of financial resources, but financed by private funding, in which case it will be unfairly distributed, or will our pensioners have a smaller share of financial resources?

Mr. Lawson: Whichever way pensions are provided, those resources must be provided by the growth of the economy. There is a big difference between people making their own provision over and above the basic state pension and a funded scheme which will guarantee them a pension in the years ahead, and those who rely on the good will of the taxpayers of the day. Contrary to what the Leader of the Opposition appears to believe, SERPS is not a funded scheme.

Sir Anthony Grant: Does my right hon. Friend agree that the attitude of the Opposition to wider share ownership now is rather curious, given that when the scheme of wider share ownership was formed it was supported by Labour Members, especially by Lord Lever, who believed passionately that it was important to turn earners into owners? Why has their attitude changed since his day?

Mr. Lawson: That is a good question. My hon. Friend is right, but the difference goes deeper than on this issue. The Labour party today is very different from the Labour party of Lord Lever's time. It is now the party of extremism and mayhem.

Several Hon. Members: rose—

Mr. Speaker: Order. This may be an appropriate moment to say that the Chancellor of the Exchequer can answer only for those matters for which he is directly responsible.

Inflation

Mr. Wareing: asked the Chancellor of the exchequer if he will make a statement on the present level of inflation.

Mr. Lawson: Over the 12 months to May 1985, the retail prices index increased by 7 per cent.

Mr. Wareing: Does the Chancellor agree that his answer proves that the Government's only claimed achievement is purely ephemeral? Will he admit that his strategy is in jeopardy because of high interest rates and the pressure that they will put upon wage demands this autumn? Will he give a categorical assurance that, given the Government's track record in doctoring figures, he will not take mortgage interest payments out of the retail prices index?

Mr. Lawson: On the latter point, there is no question of the Government taking out mortgage interest payments. I imagine that the hon. Gentleman is referring to the announcement made to the House more than a year ago by my right hon. Friend the Secretary of State for Employment, who said that he was reconvening the independent Retail Prices Index Advisory Committee to re-examine the treatment of housing costs in the RPI. Obviously, we must await what that independent committee recommends. As it is, only the United Kingdom and Canada retain the mortgage interest rate in their indexes. However, we shall abide by what the independent committee suggests.
As for the figure of 7 per cent., the hon. Gentleman will be aware that the Labour Government did not manage in any month during their period of office to get a figure anything like as low as 7 per cent. The average monthly figure was 15½ per cent. Seven per cent. is not satisfactory. We shall be getting it down during the latter part of this year. I see that the independent London Business School forecasts that a year from now inflation will be 4¼ per cent.

Mr. Latham: In the interests of reducing inflation by cutting the mortgage rate, will my right hon. Friend assure us that he will not unduly resist benign market forces if they wish to push interest rates down?

Mr. Lawson: I do not fix mortgage rates. They are fixed by the building societies. My hon. Friend may be assured that I shall not interfere in any way with their decisions. I have said on a number of occasions that the general level of interest rates will be maintained at whatever level is necessary to ensure monetary conditions that will bring inflation down.

Mr. J. Enoch Powell: As the Government have been successful in funding their borrowing requirement without recourse to the banks, why is inflation going up again?

Mr. Lawson: Inflation is affected by a number of things, and not least by the sharp rise in the value of the dollar against sterling during the latter part of last year. That has been reflected in prices this year. I am glad to say that since then the dollar exchange rate has improved in sterling's favour. That is why the right hon. Gentleman can be assured that inflation will continue to come down.

Mr. Maples: Is my right hon. Friend worried about the continued high level of personal borrowing and the effect that that might be having on interest rates and inflation?

Mr. Lawson: My hon. Friend is right to raise that issue. I believe that it lay behind the question by the right hon. Member for South Down (Mr. Powell). Bank lending is, of course, only a part of the total credit conditions in the economy that affect the inflation rate. I am not worried that monetary conditions at present are too lax. I do not believe that they are.

Mr. Robert Sheldon: Is it the Chancellor's intention as reported in an article by Sam Brittan in the Financial


Times today, to keep the pound as high as can be got away with to bring pressure to bear on prices and wages? Does the right hon. Gentleman recall that the last time that that policy was pursued it had disastrous effects on the levels of imports and exports and caused problems for manufacturing industry?

Mr. Lawson: Mr. Speaker pointed out to me a moment ago that I must be careful to answer only on matters for which I am responsible. I am not responsible for the articles of Mr. Samuel Brittan.

Mr. Alan Howarth: Does my right hon. Friend agree with the elder statesmen of the Labour party, the right hon. Members for Cardiff, South and Penarth (Mr. Callaghan) and for Leeds, East (Mr. Healey) that inflation is the "father and mother of unemployment"? Does he further agree that the pre-condition for controlling inflation is to keep a tight grip on public expenditure and that those who care about unemployment are misguided if they urge him to adopt a more relaxed approach to public expenditure?

Mr. Lawson: My hon. Friend put the point well. That is the central truth. I am sure that he will be as glad as I am to note that during the two years or so since the last general elction the number of people in work has risen by about 600,000. That is more than in the whole of the rest of the European Economic Community.

Dr. McDonald: Will the Chancellor impose even higher rates of interest and even more cuts in public spending in an effort to squeeze inflation out of the system? Is he aware that such methods could force unemployment up nationally by 17 per cent., which is the current rate of increase in joblessness in Brecon and Radnor?

Mr. Lawson: I am glad that the hon. Lady was able to mention Brecon and Radnor. I hope that it makes her feel a great deal better. The rest of what she said was absolute nonsense.

Mr. Wainwright: Does the Chancellor realise that his mismanagement of interest rates this year has so greatly increased inflationary expectations that the threatening warnings about higher pay settlements which he addressed to the CBI this week should have been addressed to himself?

Mr. Lawson: I disagree. There has been no rise in inflationary expectations. The forecasts of every independent forecasting institution show that inflation will fall steadily in the second half of this year and into 1986.

Johnson Matthey Bankers

Mr. Skinner: asked the Chancellor of the Exchequer if he will now publish the Price Waterhouse report on the collapse of Johnson Matthey Bankers: and if he will make a statement.

The Economic Secretary to the Treasury (Mr. Ian Stewart): I refer the hon. Gentleman to the statement made by my right hon. Friend the Chancellor on 20 June.

Mr. Skinner: Are the Minister and his friend the Chancellor afraid to publish the truth?

Mr. Peter Bruinvels: Where was the hon. Gentleman?

Mr. Skinner: I was in Brecon and Radnor getting in Labour votes. [Interruption.]

Mr. Speaker: Order. Let the hon. Gentleman ask his question.

Mr. Skinner: Will the Minister confirm that one of the biggest borrowers from Johnson Matthey Bankers is a friend of the Prime Minister and the Secretary of State for Trade and Industry? Will he also confirm that that man borrowed more than £15 million and employed the son of one of the directors of Johnson Matthey Bankers? Is that why the Government are not prepared to let people know what is in the Price Waterhouse report? Is it not a fact that, on a day when Lambeth is being covered and crawled over by accountants, there is one law for people prepared to carry out the mandate of the people, but no scrutiny from the Bank of England for a company which has lost £248 million? Is there not one law for the bankers and another for Labour councillors in Lambeth, Edinburgh and Liverpool?

Mr. Stewart: No, Sir.

Mr. Dickens: Why did my hon. Friend not refer the hon. Member for Bolsover (Mr. Skinner) to the Bank of England annual report now published and lodged in the Vote Office, documents Nos. 104 and 105, giving a blow-by-blow account of the rescue operation and an inter-round summary, the main thrust of which clearly shows that if the rescue operation had not taken place there would probably have been no danger to the United Kingdom bullion and gold market, but that, due to misunderstandings throughout the world, we might have been at risk? Why does my hon. Friend not give the hon. Gentleman the facts?

Mr. Stewart: rose—

Hon. Members: Answer.

Mr. Speaker: Order. Give the Minister a chance.

Mr. Stewart: I could indeed have referred the hon. Member for Bolsover (Mr. Skinner) to the information contained in that report, but as he asked such a concise question I was anxious to give him a concise reply.

Mr. Sedgemore: If the Select Committee on the Treasury and Civil Service decides to hold an inquiry into the collapse of Johnson Matthey Bankers, may we have an assurance that the Chancellor will appear at the inquiry and that the Price Waterhouse report will be made available, at least on a confidential basis?

Mr. Stewart: I cannot possibly answer questions about hypothetical decisions of the Select Committee on the Treasury and Civil Service.

Value Added Tax

Mr. Amess: asked the Chancellor of the Exchequer what plans he has for an extension of the payment date for value added tax to Her Majesty's Customs and Excise.

Mr. Ian Stewart: We have no plans to extend the due date for payment of VAT.

Mr. Amess: Does my hon. Friend realise that many small businesses in my constituency of Basildon and throughout the country are under increasing pressure to meet VAT payments, while larger firms seem to be extending their line of credit? Will he assist by introducing a flexible payment system? Does he agree that many of


those small firms are the life blood of our country and that it would be a mistake to kill the goose which might possibly lay the golden egg?

Mr. Stewart: I am not sure exactly what my hon. Friend has in mind in terms of a flexible payment system, but I shall certainly bring the point to the attention of my right hon. Friend the Minister of State, who is responsible for Customs and Excise matters. As for larger companies which are slow in making payments to small businesses in Basildon and many other parts of the country, I hope that those who behave in that way will note my hon. Friend's comments.

Mr. Campbell-Savours: Is the Economic Secretary aware of the extra-statutory concession that was introduced in 1981, which was not debated in Parliament, which extended to barristers the right to defer payment of VAT until they had received payment from their clients? Will he examine the amendment that I have tabled for the Report stage of the Finance Bill, which would extend that notable right to 121 further categories of traders? May we have equality in the tax system? Will the Economic Secretary ensure that the Whips instruct his Back Benchers to vote for my amendment if Mr. Speaker wishes to select it?

Mr. Stewart: I shall look at the wording of the amendment that the hon. Gentleman has tabled.

Manufactured Goods (Exports)

Mr. Kenneth Carlisle: asked the Chancellor of the Exchequer whether the exports of manufactured goods over the past year give evidence of economic recovery.

The Chief Secretary to the Treasury (Mr. Peter Rees): Yes. The monthly trade figures for May 1985, published this morning, show that manufacturing exports in the three months to May are up by 13 per cent. on a year earlier.

Mr. Carlisle: I welcome that encouraging performance, but has that success been matched by a growth in manufacturing investment, as is required if we are to maintain this performance in the future?

Mr. Rees: Yes. I am happy to tell my hon. Friend that the figures for 1984 show an increase in manufacturing investment of 14 per cent., which I hope will provide the basis for a sustained improvement in manufacturing exports.

Dr. Bray: Would not the Chief Secretary be more encouraged by the trade figures if they were the result of an increase in exports rather than a fall in imports? Is he not a little concerned about whether the fall in imports means that we have reached an incipient fall-off in the rate of growth, if not a recession?

Mr. Rees: There is no evidence that we are heading for a recession. All the indications are that we are in the fifth year of growth since the trough of the recession.

Mr. Stokes: Does my right hon. and learned Friend agree that while the performance of British exports is excellent, the real problem facing manufacturing industry is the penetration of the home market? Can the Government provide help?

Mr. Rees: Yes we can, by creating the right climate for an improvement in our economic performance, to

which the Government's economic policies have been devoted. The figures show that British industry is becoming more competitive and that it will be able to retain a share of the home market.

Mr. Terry Davis: Surely the Chief Secretary appreciates that it is the balance of trade in manufactured goods, not the level of exports, that is most important. If the Chief Secretary is so pleased with the level of exports, will he explain why our balance of trade in manufactured goods is heading for a further deterioration—indeed, the fifth deterioration?

Mr. Rees: It is more important to recognise the overall performance, which shows that so far this year there is a current account surplus of £724 million. The forecast for this year is an increase of £3 billion.

Economy Recovery

Mr. Merchant: asked the Chancellor of the Exchequer what further evidence he has of the strength of the economic recovery.

Mr. Lawson: Gross domestic product grew by an underlying 3½ per cent. between the first quarters of 1984 and 1985. This year the United Kingdom is likely to have the fastest growing economy in the European Community, and in all probability it will grow faster than that of the United States, too.

Mr. Merchant: Does my right hon. Friend agree that this good news will produce an effect that will result in even better news, namely, a reduction in unemployment? Does he broadly agree with a recent CBI study which illustrated this effect by predicting that 1 million new jobs would be created by the end of this year?

Mr. Lawson: My hon. Friend is right to draw attention to the CBI study, which was extremely encouraging both about manufacturing in general and about employment. I referred earlier to the growth in employment during the last two years. That is expected to continue. The level of unemployment will be assisted by the measures which I took in this year's Budget, which will not have an effect until next year. It will also be affected by the level of pay increases, which is still running at too high a level if we are to price sufficient numbers of people back into work.

Mr. Wrigglesworth: Does the Chancellor agree that, if interest rates remain at their present high levels, that will severely damage the prospects for economic growth as they will increase the level of inflation, give rise to inflationary expectations by wage bargainers and result in a higher value for the pound, which will make it more difficult for manufacturing and service industries to export? In the light of that, will he reconsider his condemnation of the call by the CBI to reduce interest rates, and will he take action to do so?

Mr. Lawson: No, but the House will have noted that the SDP representative is in favour of measures which would undoubtedly lead to faster inflation.

Mr. David Howell: Does my right hon. Friend accept that his renewed commitment to tax cuts as the path to recovery, higher employment and enterprise is very welcome? Will he also confirm that his right hon. Friend the Secretary of State for the Environment has authorised greater capital spending by local authorities from capital


receipts? Will that not also make a great contribution to economic recovery, and is that not consistent with the Government's financial strategy?

Mr. Lawson: On the first half of my right hon. Friend's question, I am indeed glad to have his endorsement of the importance of further reductions in the burden of income tax on the people as a whole as a means of ensuring a sound, healthy and growing economy. I also believe that that is what the people want. As for local authority capital expenditure, it appears that there is some overspend on the figures originally allowed for. This is catered for by the reserve, but at this stage it is difficult to say precisely what the overspend will be.

Mr. Robert Sheldon: Will the Chancellor now answer the question which he declined to answer a few minutes ago? Is it the Government's intention to keep the value of the pound as high as they can get away with to keep up pressure on prices and wages?

Mr. Lawson: I do not determine the rate of exchange, as I have made clear to the House on a number of occasions, but I have noted that the Opposition are always complaining that the pound is either too high or too low.

Mr. Beaumont-Dark: Does my right hon. Friend accept that there are very real signs of a recovery in manufacturing industry, as shown by the recent unemployment figures in the midlands, which dropped while those for the nation as a whole went up? Does he also accept, since a review is now taking place into export credit guarantees, that we have lost some contracts to overseas business whose terms have been more generous? Will he urge on the Department of Trade the importance of making sure that financing is available on equal terms with our competitors?

Mr. Lawson: The Export Credits Guarantee Department does an excellent job, as I am sure my hon. Friend will concede. The whole question of export credit and aid and trade provision is constantly under review. I am sure my hon. Friend will agree that there is little point in extending credit to countries beyond their capacity to repay. As for the recovery in the midlands, since I represent a midlands constituency, as does my hon. Friend, I find that particularly welcome. I am sure that my hon. Friend will also warmly welcome the recent announcement that non-North sea profits during the first quarter of this year are 25 per cent. up on the first quarter of last year.

Mr. Hattersley: If the recovery is so well established, why did the index of manufacturing output fall by 1·3 per cent. in one month? Indeed, why is manufacturing output still substantially lower than it was in the spring of 1979?

Mr. Lawson: Manufacturing output is steadily rising. Last year's increase of 3·5 per cent. was the highest in any year since 1973. The right hon. Gentleman may not be aware of it, but the shape of the economy is changing, and many manufacturing industries here, just as in many other countries, are now a smaller part of the total economy, whereas other sectors are growing very rapidly. The overall economy is growing fast, and I would hope that the right hon. Gentleman would be the first to welcome that.

Mr. Higgins: With regard to local councils spending the receipts from council house sales on further housebuilding, will my right hon. Friend accept that this

is not import-intensive but it is labour-intensive; it increases labour mobility and is likely to encourage greater employment?

Mr. Lawson: I am glad to say that the numbers of total housebuilding starts are looking very encouraging. I believe that it is more desirable to encourage the growth of private sector housing than a further extension of municipal ownership.

State Earnings-related Pension Scheme

Mr. Winnick: asked the Chancellor of the Exchequer if he will make a statement about the likely cost to the Exchequer over the next five years of extra tax concessions to pension funds that will result from the proposals for the phasing out of the state earnings-related pension scheme.

Mr. Moore: No extra tax concessions are envisaged. The proposed arrangements would be subject to the same tax treatment as existing superannuation arrangements.

Mr. Winnick: Is not the position that the phasing out of SERPS will mean an overall cost to the Treasury? Is this one of the reasons why there was such a severe clash between the Chancellor and the Secretary of State for Social Services, which the Prime Minister tried to resolve?

Mr. Moore: No, in so far as the last apocalyptic aspects of the hon. Gentleman's questions are concerned, that is not accurate. He is right to remind us of what my right hon. Friend the Secretary of State for Social Services said on 19 June in the Select Committee on Social Services, when he estimated that the proposals could reduce tax revenues by somewhere in the region of £300 million.

Pensioners (Housing Benefit)

Mr. Andrew Bowden: asked the Chancellor of the Exchequer if he will make a statement on the implications for tax policy of the proposals for housing benefit for pensioners in the Green Paper on the reform of social security.

Mr. Moore: The implications of all the proposals in the social security Green Paper for tax policy will be kept under review.

Mr. Bowden: Will my hon. Friend accept that it is ludicrous that some people who are receiving housing benefit are also paying tax? Will he further accept that many pensioners in receipt of housing benefit have had the purchasing value of their non-inflation proof occupational pensions reduced by 86 per cent. in the last 12 years? Is it not true that housing benefit is some small compensation for that section of the community?

Mr. Moore: With regard to the specific tax aspects of the question, my hon. Friend is right to say that the inability of Governments in the past properly to raise the tax threshold has created problems; and I know that he will welcome the Government's moves in the last few years to raise real thresholds by 20 per cent. He is also right to say that the prime victims, among the many victims of the evil of inflation, are those who are elderly and those who are seeking to live on the thrift that has produced a modest amount of capital for their old age. I know that he will join


me in supporting the Chancellor to make sure that we eradicate inflation, which affects such people more than any other section of the community.

Limited Liability Companies

Mr. John Mark Taylor: asked the Chancellor of the Exchequer what proportion of limited liability companies operate below the value added tax threshold; and if he will estimate how much revenue would be lost if it was raised (a) to £20,000 and (b) to £25,000.

Mr. Peter Rees: The proportion of VAT registered traders with turnover below the threshold is about 20 per cent. of the total VAT registered trader population. To increase the threshold to £20,000 would have a negligible revenue cost, and to £25,000, about £30 million.

Mr. Taylor: In thanking my right hon. and learned Friend for that helpful reply, may I ask him to comment on the small business lobby, which has said that it would be good for business energy and good for employment to raise the threshold to £50,000?

Mr. Rees: I have noted those comments, but equally my hon. Friend and the House will have noticed that there have been representations from other quarters suggesting that to increase substantially the threshold would result in a distortion of competition. Indeed, during consideration of the Finance Bill my hon. Friend the Member for Enfield, North (Mr. Eggar) suggested in an amendment which was not selected, that the threshold should be reduced for the construction industry.

Mr. Yeo: Is my right hon. and learned Friend aware, however, that many small businesses in Suffolk and throughout the country would regard a substantial increase in the threshold at which they became liable to register for VAT as the single most useful step that the Government could take to try to assist their development, and that they regard such a move as long overdue?

Mr. Rees: I note the comments of my hon. Friend regarding East Anglia, but he and the House may be aware that there are already 300,000 traders who are trading at below the threshold but who have not chosen to de-register. This may indicate some evidence the other way, in that it does not quite reflect the hardship that my hon. Friend's question indicates.

Betting Tax Levy

Dr. Mawhinney: asked the Chancellor of the Exchequer how many representations he has received from professional association football clubs about the betting tax levy.

The Economic Secretary to the Treasury (Mr. Ian Stewart): Representations have been received from the Football League and about two dozen clubs.

Dr. Mawhinney: Will my hon. Friend confirm that it remains his policy to take a sympathetic attitude towards third and fourth division football clubs faced with large bills for safety and security measures if it becomes necessary for them to appeal to him for help?

Mr. Stewart: I note what my hon. Friend says and compliment him on the interest that he is taking in those clubs. I am sure that it would be best, as my right hon.

Friend the Prime Minister has said, to conduct a thorough inquiry into the whole question before deciding what is needed.

Mr. Ashton: Why is it that, when it comes to law and order on the picket lines, the Government will pick up a bill of £900 million for policing during the miners' strike, yet when it comes to law and order at football matches and providing safety at football ground, they rip off over £200 million from the betting tax and give nothing back? Why will the Government not set up a betting levy board for football as has been done for horse racing?

Mr. Stewart: The hon. Gentleman may have overlooked the fact that, for racing, both betting duty and levy apply.

Public Sector Borrowing Requirement

Mr. Pike: asked the Chancellor of the Exchequer if he will make a statement about the funding of the public sector borrowing requirement.

Mr. Peter Rees: The Government's practice is to finance their borrowing requirement in a non-inflationary way.

Mr. Pike: Will the Government, in pursuance of their monetarist policies and their desire to contain the PSBR, make further cuts in public expenditure, or will they sell more public assets?

Mr. Rees: The Government's policy has always been to maintain firm control over the level of public spending and to maintain it at a broadly constant level in real terms.

Sir William Clark: Does my right hon. and learned Friend agree that under the last Labour Government the public sector borrowing requirement as a percentage of GDP increased to 9·2 per cent., while today it is 2 per cent.? Even at 2 per cent. of GDP it is costing the taxpayer £18 billion to service the national debt. Is that not high enough? Would it not be folly to increase the PSBR?

Mr. Rees: I entirely agree with my hon. Friend's conclusions. As a consequence of the profligate policies of the last Labour Government, the IMF had to intervene to restore us to solvency.

Mr. Wainwright: Does the right hon. and learned Gentleman not understand that the Government's policy of persistently overfunding and borrowing substantially more than public borrowing requires makes nonsense of their claim to the Opposition parties that more borrowing would lead to even higher interest rates?

Mr. Rees: I think that the hon. Gentleman misunderstands our position. Overfunding is not expansionary. Like previous Governments, we use a mixture of interest rates and funding policy to maintain monetary control.

Building Societies (Deposits)

Mr. Greenway: asked the Chancellor of the Exchequer what recent representations he has received about the level of the ceiling for depositors with building societies; and if he will make a statement.

Mr. Ian Stewart: Following discussion with the Building Societies Association, abolition of the limit on


building society investments under the composite rate arrangements was announced on Budget day and took effect from 6 April 1985.

Mr. Greenway: I welcome the abolition of the ceiling on the amount that depositors can invest in building societies. What effect has this had on the level of deposits? Will it lead in due course to a reduction in interest rates for mortgagees? Does my hon. Friend have any other plans for different roles for building societies?

Mr. Stewart: It is too early to say whether the abolition of the ceiling on deposits will have a material effect on the inflow of funds into building societies. Those funds determine the building societies' ability to lend at a particular rate. I draw my hon. Friend's attention to the speech that I made on 6 June in Eastbourne confirming many of the proposals in the Green Paper, which will enable the building societies to compete more effectively in the market place, especially on an equivalent basis to the banks.

Mr. Heddle: Does my hon. Friend accept that the proposals that he put forward to the building society movement at that conference were widely accepted and that they will benefit the depositor and the home-owner alike? Will he ensure that the legislation which he will, perhaps, introduce next Session preserves the integrity of the building society movement, which is widely respected? Will he ensure also that building societies do not fall prey to overseas financial institutions?

Mr. Stewart: I am glad to know of the welcome that my hon. Friend gives the proposals for reform of the building societies. Although I believe that it is a good thing for the building societies to have wider powers, in relation to both their balance sheets and their other functions, I am conscious that it is important to maintain the principal characteristics of building societies, which have ensured their reputation for such a long period as a safe home for savings and as a means of providing home ownership.

Licensing Laws

Mr. Maclean: asked the Chancellor of the Exchequer if he has made a calculation of the effect on income to the Treasury of more liberal licensing laws.

Mr. Moore: No, Sir.

Mr. Maclean: Does my hon. Friend accept that if we were to have more liberalised licensing laws that would have an effect on the income that the Treasury would receive, because to the additional number of foreign tourists who would come to this country to drink under laws as civilised in England as they are in Scotland?

Mr. Moore: I can see the surface attraction to the Treasury in terms of revenue, but my hon. Friend will know that licensing hours policy and related issues are matters for my right hon. Friend the Home Secretary.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Wrigglesworth: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had

meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I shall be travelling to Milan for a meeting of the European Council.

Mr. Wrigglesworth: Will the Prime Minister take an opportunity now to say where she stands in the row between the Chancellor of the Exchequer and the Leader of the House over future income tax cuts? If she is in favour of further income tax cuts, will she explain to the 3·25 million unemployed, all those with bad housing, the parents who want better education in the schools, and many others, why the revenue from North sea oil and from the massive sale of public assets is not being reinvested in the crumbling fabric in this country instead of being given away in election bribes and income tax cuts?

The Prime Minister: With regard to the speech by my right hon. Friend the Leader of the House, he pointed out very vigorously that expanding welfare policy could be financed only by the proceeds of profitable industry and commerce. My right hon. Friend the Chancellor of the Exchequer pointed out that company profitability last year was the highest ever and that investment reached an all-time high. It seems to me that the two speeches fit together admirably.

Mr. Temple-Morris: Would my right hon. Friend like to confirm firmly that it is not Her Majesty's Government's policy to re-rate agricultural land? Is she aware that hon. Members from both the Social Democratic and the Liberal parties in the so-called alliance are for once in unison in the sense that they have recently shown an intention in the House to re-rate agricultural land?

The Prime Minister: I gladly confirm once again that it is not this Conservative Government's policy to re-rate agricultural land. I am grateful to my hon. Friend for emphasising that.

Mr. Merlyn Rees: Does the Prime Minister recall the activities of Admiral Cochrane, who stood for Parliament in Honiton in 1806—

Mr. Speaker: Order. Before we get too far down that historical line, does the question relate to the Prime Minister's responsibilities?

Mr. Rees: Admiral Cochrane reneged on his promise to pay 10 guineas a head to those who voted for him and never returned to Honiton again. Does the right hon. Lady think that "Field-Marshal" Heseltine will ever go back to Brecon and Radnor?

The Prime Minister: I should have thought that the right hon. Gentleman would be pleased with the decision to use Crickhowell barracks as a training camp and a Territorial Army centre, following extensive representations, including the delegation to my right hon. Friend from Lord Hooson. I would also have thought that the right hon. Gentleman would have noted that as long ago as 12 December 1984, long before there was any thought of a by-election in Brecon, it was announced by the Parliamentary Under-Secretary of State for the Armed Forces that the Ministry of Defence, following inquiries, was looking for alternative military uses and was identifying possibilities.

Mr. Meadowcroft: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister: I refer the hon. gentleman to the reply that I gave some moments ago.

Mr. Meadowcroft: Will the right hon. Lady accept that the action yesterday by the Secretary of State for Defence conforms brilliantly to the rule that elections work wonders? May we, in the next six days, have an extension of that rule to cover special credit facilities for newcomers to fanning — [HON. MEMBERS: "Reading."] — for increased expenditure on high schools in Powys—[HON. MEMBERS: "Reading."] — for the withdrawal of the Transport Bill to rescue rural buses—[HON. MEMBERS: "Reading."]—an assurance that there will be no nuclear dumping in Wales—[HON. MEMBERS: "Reading."]—and—

Mr. Speaker: Order. No reading of supplementary questions, please.

Mr. Meadowcroft: To facilitate matters, Mr. Speaker, I shall send the right hon. Lady the list.

The Prime Minister: I thought that the hon. Gentleman's king had been trumped previously. Along with the Crickhowell decision, there was also announced the retention of the Gordon barracks near Aberdeen, a constituency now held by a Liberal. I know of no impending by-election there, unless the hon. Member for Gordon (Mr. Bruce) is so dissatisfied with the Liberal party that he intends to apply for the Chiltern Hundreds.

Mr. Kenneth Carlisle: Is my right hon. Friend aware that a business, Oak Publications, newly set up in Lincoln to publish a free newspaper, has been blacked by the NGA because it refuses to impose a closed shop after the employees, in a free vote, rejected a closed shop? [HON. MEMBERS: "Reading."] Is she aware that that action has, in this new enterprise, frustrated nine jobs — [HON. MEMBERS: "Reading."]—at the hands of the NGA? Will my right hon. Friend agree that in the English language we have a clear word for action of that sort, "tyranny"?

The Prime Minister: I agree with my hon. Friend that it is a disgraceful act of intimidation and attempted coercion to try to put a small man out of business by saying that there will be a closed shop unless that small business man does as others say. It is an act of tyranny and I hope that he will take up his rights in law.

Mr. Hattersley: Now that the retail prices index has risen to 7 per cent., will the Prime Minister repeat and confirm the forecast of 3 per cent. inflation by the end of this Parliament, which she made somewhere in south-east Asia two and a half months ago?

The Prime Minister: Before I refer to the figure of 3 per cent., I would point out to the right hon. Gentleman that although the retail prices index is at 7 per cent., which is bad for this Government, we have a better record than anything achieved under Labour. The answer to the last part of his supplementary question is that 3 per cent. is an attainable target.

Mr. Hattersley: I leave aside the retreat from forecast to target, which is backing away in quite spectacular terms. As the Prime Minister is into comparisons as well as forecasts, will she also confirm that unemployment, real interest rates, company liquidations, the manufacturing trade deficit and mortgage rates are not only higher now than during any month of the Labour Government's history, but are higher than at any time during the history

of Great Britain as a whole? And since, as well as making comparisons, the right hon. Lady is making forecasts, will she say by polling day whether unemployment, mortgage rates and interest rates will have come down and whether there will be any improvement in any of the other disasters?

The Prime Minister: Had the right hon. Gentleman been in Government, the position would have been far worse and we should have gone to the IMF again and joined the list of those who are trying to get help from the IMF, instead of, under this Government, being in the list of those who are giving help through the IMF.

Mr. Hattersley: Instead of irrelevant hectoring, will the Prime Minister answer the question? Is it not a fact that all the indicators that I just described are now worse than at any time in our history? Does the right hon. Lady expect any improvement in one of them before polling day?

The Prime Minister: As I said, the position would have been far worse had the right hon. Gentleman been in power. I do not dismiss as lightly as he does the record of Labour in going to the IMF. It was the worst disgrace Britain suffered. His Administration borrowed money and we are still having to repay what they borrowed.

Mrs. McCurley: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mrs. McCurley: Will the Prime Minister take this opportunity of confirming to the House the Government's resolve to enhance the status of women in Britain and abroad? In view of the recent agreement to ratify the convention on equality for women from the United Nations, will my right hon. Friend take this opportunity to tell the women of Britain of the Government's excellent record in promoting them in education, the sciences and work?

The Prime Minister: I am grateful to my hon. Friend. This country has the second highest proportion of women in the labour force in the European Community. The long-term trend is towards an increase in the number of women at work. In the past four years the number of young women entering higher education rose by 17 per cent. In 1982–83 nearly half the new medical students were women, and the number of women studying engineering and technology has doubled in less than 10 years. Those are new opportunities for women under this Government.

Mr. Alfred Morris: What are the Prime Minister's comments on the snide and widely condemned remarks earlier this week by the Secretary of State for Wales, in which he made clear his contempt for mentally handicapped people? Has he been reprimanded?

The Prime Minister: My right hon. Friend the Secretary of State would do no such thing. The right hon. Gentleman has grossly misinterpreted what was said.

Mr. Hume: Will the Prime Minister ensure at the Milan summit, for which she is departing this evening, that the problems of famine in Africa are high on the agenda, and particularly that there will be a positive and adequate response to the tragedy of Sudan?

The Prime Minister: I believe that that matter will almost certainly come up during our discussions, but


probably in the separate meetings, not the main meeting, which is on the European Community. On the last occasion when we were at Brussels we asked for a report, in particular on the difficulty of distributing the stocks of food, which is one reason why they do not always reach those who are suffering from famine.

Mrs. Virginia Bottomley: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mrs. Bottomley: Now that the great majority of rate-capped local authorities have set a rate, has my right hon. Friend noticed the scenes of violence, intimidation and disruption at council meetings, and will she seek broad agreement that there is no place for such behaviour in local democracy and that it should be condemned on all sides?

The Prime Minister: I entirely agree with my hon. Friend. Some of the scenes, in places such as Southwark, Brent and Hackney have been the face of Socialism in power—a face of violence and intimidation. I hope that when Lambeth sets a legal rate—if it does so—we shall see no more of those scenes, because they are totally undemocratic. They are scenes of the Fascist Left.

Mr. Pavitt: Will the Prime Minister give more profound thought to and review the answer that she gave to me several months ago about the economic consequences for women who have had a breast amputated and undergo chemotherapy? Does she realise that, since she made her statement at the 1983 Conservative conference, a woman who has chemotherapy has to pay £2 every three weeks, or £31.50 a year? Will she ask the Secretary of State for Social Services to add a ninth category to the British Medical Association's list of eight scheduled diseases—mastectomy?

The Prime Minister: I think that the hon. Gentleman is asking about what diseases are scheduled for the purpose of receiving free treatment. I believe that that is the point of the question that he is asking.

Mr. Pavitt: No.

The Prime Minister: In that case, perhaps the hon. Gentleman will put it to me in writing. As he knows, it has not been possible to review that schedule to include the diseases in which he is interested.

Mr. Hannam: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Hannam: Will my right hon. Friend confirm her support for my right hon. Friend the Chancellor of the Exchequer in his determination to reduce the high levels of personal taxation? Is this not in direct contrast with the policies of the Leader of the Opposition, which are basically the same as the policies of his predecessor—high taxation and high inflation?

The Prime Minister: Yes, the policies of the Labour party when it was in power resulted in 2 million more

people being in the income tax bracket when it left office than there were when it entered office. We have taken people out of tax. The Labour party introduced new taxes, such as the national insurance surcharge, and we have abolished taxes. We have increased thresholds—that is the tax-free allowance—which are now 20 per cent. higher than they were when the Labour Government were in power.

Dame Jill Knight: asked the Prime Minister if she will list her official engagements for Thursday 27 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Dame Jill Knight: Will my right hon. Friend bear in mind that not everybody welcomes with open arms the implications of the ratification of the United Nations convention on discrimination against women? Can my right hon. Friend protect this country from the trap that has been discovered in other countries when they have ratified, which is that 50 per cent. of all the work force in certain firms, no matter how heavy or unsuitable the jobs, have to be women?

The Prime Minister: I know my hon. Friend's views on this, and I know that she will understand that when we ratified the convention we entered a number of reservations about it, which were made as a result of insistent representations from my hon. Friend.

Mr. Ray Powell: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Is it directly arisng out of questions?

Mr. Powell: Yes, it is, Mr. Speaker. I seek your guidance to find out how it is possible for us to have a clear understanding from the Prime Minister when a question is asked about one of her Ministers who made a statement, which was publicly announced in most of the national and local press. The Prime Minister denied that that statement was made, although it was released by the Secretary of State for Wales to the Press Association. How do Back Benchers pursue the matter—when a question is asked and a reply such as we had today is given—to ensure that they get a truthful and a proper reply from the Prime Minister?

Mr. Speaker: I said earlier, and I think that the hon. Gentleman will accept it, that the Prime Minister, or any other Minister, can only answer questions about her direct responsibilities. I suggest that the hon. Gentleman's correct course, if he is concerned about the statement made by another Minister, is to put that question direct to the Minister.

Mr. Parry: Further to that point of order, Mr. Speaker.

Mr. Speaker: We shall be delayed.

Mr. Parry: This point of order arises from the point made by my hon. Friend the Member for Ogmore (Mr. Powell). The Prime Minister has denied that the Secretary of State made that statement, when the Minister has agreed to withdraw it and apologise. Will—

Mr. Speaker: Order. I know nothing about such statements.

Business of the House

Mr. Roy Hattersley: Will the Leader of the House state the business of the House for next week?

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen,: Yes, Sir. The business for next week will be as follows:
MONDAY 1 JULY — Until seven o'clock, private Members' motions. Consideration in Committee of the European Communities (Finance) Bill.
Proceedings on the Further Education Bill (Lords).
Motion on the African Development Fund (Fourth Replenishment) Order.
TUESDAY 2 JULY—Opposition Day (18th Allotted Day) (First Part). Until seven o'clock there will be a debate on an Opposition motion entitled "Government cuts in the National Health Service".
Motion on the British Steel Corporation (Borrowing Powers) Order.
Motion on the Supplementary Benefit (Requirements) Amendment Regulations Order.
WEDNESDAY 3 JULY — Proceedings on the Sporting Events (Control of Alcohol Etc.) Bill.
Motions on the Local Government (Miscellaneous Provisions) (Northern Ireland) Order and the Credit Unions (Northern Ireland) Order.
THURSDAY 4 JULY — Opposition Day (19th Allotted Day). There will be a debate on a motion on the restoration of stability in Northern Ireland. The subject has been chosen by the Ulster Unionist Party.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
FRIDAY 5 JULY—Private Members' Bills.
MONDAY 8 JULY—Remaining stages of the Oil and Pipelines Bill.

Mr. Hattersley: I am grateful to the right hon. Gentleman. May I ask three questions? Does he recall that the Opposition expect an early debate on the Johnson Matthey collapse? Debating a Bill which provides extra controls for the future will not do—there must be a debate on the collapse and the Bank of England's part in that debacle.
On Wednesday 3 July we are to debate the limitation of alcohol sales at football grounds. The football season is now only eight weeks away. Is this Bill all that we shall get, after the sound and fury in Downing street a few weeks ago? Will spectators be left unprotected and will grounds be left unimproved because the Government will not assist in any way in regard to money, or will there be another debate and another statement on football and the dangers therein?
Can we be told how the Government propose to respond to their defeat in the Northern Ireland Committee on their proposal to end the production of town gas in Northern Ireland? Should not the matter be debated on the Floor of the House? Is that a possibility? We believe that it should be.

Mr. Biffen: On the right hon. Gentleman's third point, I gather that it is a technical vote which has no significance for the legislation under consideration but, if the right hon.

Gentleman wants to mention the topic, I should have thought that the debate on Thursday 4 July would give him an opportunity.
As for the debate which is promised for Wednesday on the Sporting Events (Control of Alcohol Etc.) Bill, I assure the right hon. Gentleman that we appreciate the talks that have taken place with the Opposition and other parties. We hope that good progress can be made. The House will consider this Session the contribution that legislation will make to solving the problem.
I appreciate what the right hon. Gentleman said about his desire for an early debate on the Johnson Matthey affair. Perhaps we could pursue this matter through the usual channels.

Sir Ian Percival: May I remind my right hon. Friend of my early-day motion, which was tabled soon after the Grand Hotel bombing and which has attracted the signatures of some 181 of my right hon. and hon. Friends? Does he recall that that motion invites the House to reaffirm
its total resolve that the freedoms of which it is the guardian must never be lost or lessened by violence or the fear of it"?
It goes on to consider whether those who show such total lack of concern for the lives of others should not forfeit their own lives if caught and convicted. Will my right hon. Friend endeavour to allot time, before the House rises for the summer, for discussion of that or a similar measure so that the House may demonstrate to the country its absolute determination in these matters?

Mr. Biffen: I am grateful to my right hon. and learned Friend for drawing attention to that motion again. I am sure that there is a deep detestation in all quarters of the techniques of violence and the terrorist violence which have appeared yet again recently, but there is no prospect of Government time being made available for such a motion in the very near future.

Mr. J. Enoch Powell: Will the Leader of the House confirm that he will provide an extra hour for the debate on the first of the two Northern Ireland orders set down on Wednesday? Will he also do his best to avoid statements on Thursday, which would curtail time for the subsequent debate on the motion?

Mr. Biffen: I understand the importance that the right hon. Gentleman and his right hon. and hon. Friends attach to the first point. Perhaps he could examine that through the usual channels. I hope that we shall be able to accommodate his anxiety. I also note his second request.

Sir William Clark: Further to the question asked by my right hon. and learned Friend the Member for Southport (Sir I. Percival), will my right hon. Friend assure us that, although there cannot be such a debate before the recess, a debate will be considered urgently as soon as we come back?

Mr. Biffen: I shall certainly take note of that point.

Mr. Jack Ashley: Is the Leader of the House aware that hon. Members on both sides of the House are worried because hospitals are above the law and are flouting food hygiene regulations, and health and safety laws? The reason for that is Crown immunity. Many hospitals are in a shocking condition, and some patients have died. Will the Leader of the House note early-day motion 808 and arrange time for a debate in the House?
[That this House notes that Crown immunity enables health authorities to flout the Health and Safety at Work Act and the Food Hygience Regulations; is deeply concerned at growing evidence that hospital patients are suffering unnecessarily; believes that it is wrong in principle and deplorable in practice for Crown authorities to be above the law relating to welfare provision; and calls upon the Government to remove Crown immunity from all premises covered by the Health and Safety at Work Act and the Food Hygience Regulations.]

Mr. Biffen: The right hon. Gentleman refers to a point which he has argued hitherto in the House. While I will refer the matter to my right hon. Friend the Secretary of State for Social Services, I can guarantee no debate in Government time at this time of the year. The right hon. Gentleman might like to consider whether the matter could come within the terms of the debate that we are promised on Tuesday.

Dame Jill Knight: Will my right hon. Friend the Leader of the House consider arranging to lift the 10 o'clock rule on Thursday 4 July so that the important private business being discussed may be completed before the summer recess?

Mr. Biffen: May I on behalf of the House congratulate my hon. Friend on her new title? The Chairman of Ways and Means has asked that the 10 o'clock rule be suspended on that day, and I am certain that it would be for the convenience of the House for that to be done.

Mr. Roland Boyes: Does the Leader of the House recall that, earlier this week, the Minister for Social Security had to come grovelling to the House and admit that after only a few days he had the regulations wrong on the board and lodging measures that he introduced? We do not want to hide the real magnitude of the problem by talking only of the suicides and pregnancies, because hundreds of thousands of our youngsters are suffering. Is it not shameful that, despite seven requests from me, the right hon. Gentleman will not allow a full debate on the matter so that Opposition Members can help the Minister to get the regulations right?

Mr. Biffen: To describe the performance of my hon. Friend the Minister for Social Security earlier this week on those regulations as grovelling is a most extraordinary representation of a masterly parliamentary performance. If the hon. Gentleman is a glutton for punishment, he can seek to participate in the debate on the motion on Tuesday.

Mr. Nicholas Fairbairn: Will my right hon. Friend the Leader of the House take time in the present climate to arrange a debate on the steps that civilised countries can take to combat international terrorism in all its forms? In his answer, will he pay tribute to the Scottish police for apparently saving the English from the Irish?

Mr. Biffen: I should like to pay tribute, but in more generous terms than those suggested by my hon. and learned Friend. On his first point, I recognise that there is widespread interest in the matter in the House, but, to put it bluntly, we are now approaching the time of year when all the time available to the Government must be used to ensure that we are not sitting in the middle of August.

Mr. Alex Carlisle: Will the Leader of the House arrange an early debate on the serious plight of

tenant farmers in the light of the Government's agricultural policy, especially bearing in mind today's decision in the Court of Appeal in the case of Williams v. the Minister of Agriculture, Fisheries and Food, which will enable the Government to carry out their decision to dump the 4,000 members of the Land Settlement Association?

Mr. Biffen: It would not be appropriate for me to comment on that case. However, I know that the re-rating of agricultural land will affect tenant and non-tenant farmers. I will draw to the attention of my right hon. Friend the Minister for Agriculture, Fisheries and Food the request for such a debate and the point that the hon. and learned Gentleman made, and we shall see what time may be made available.

Sir Kenneth Lewis: Is my right hon. Friend aware that in a recent speech, which was also masterly, he agreed with me that in politics as in music if one has a good song one should sing it? Is he aware that next week and the week after we should have some statements by Ministers about some of the achievements of the Government—for example, today's announcement of the first-class return on our balance of trade for May? Last week I received a letter from my hon. Friend the Minister of State, Department of Transport telling me that the Government are spending £312 million more on a new roads programme, about which hardly anybody knows. Will he have a word with the Prime Minister and ask her to increase the housing programme as well as the roads programme, so that we will really have something to shout about?

Mr. Biffen: I can think of no more charming prospect than my hon. Friend and myself as a sort of parliamentary duo, and that thought will sustain me in the fragile days and weeks ahead. As to the searching point that he made, I shall certainly ask my right hon. Friend the Prime Minister.

Mr. Norman A. Godman: Will the Leader of the House arrange an early debate on the serious issue of alcohol abuse and its treatment? I hasten to add that I am convinced that such addiction is thoroughly absent from this place.

Mr. Biffen: The hon. Gentleman raises a profoundly serious point that merits consideration by the House. He will appreciate that, in a relatively narrow sense, it can be debated on Wednesday. I can offer no Government time for the wider debate that he seeks, but I shall bear his point in mind.

Mr. John Stokes: Has my right hon. Friend noticed the report in The Daily Telegraph today that Derbyshire county council has banned 600 schoolchildren from singing "Rule Britannia"? Should not that disgraceful state of affairs be debated in the House?

Mr. Biffen: It is absolutely scandalous, and I am sure that the censure which my hon. Friend has just delivered will be appreciated in Derbyshire.

Dr. Jeremy Bray: Is the Leader of the House aware that it will not be satisfactory for the House to consider the British Steel Corporation (Borrowing Powers) Order next Tuesday without Ministers having received the BSC corporate plan and considered it, or made a statement to the House that the security of the big five BSC steelworks is guaranteed?

Mr. Biffen: I note the hon. Gentleman's point, and I shall draw it to the attention of my right hon. Friend the Secretary of State for Trade and Industry.

Mr. Derek Spencer: Is my right hon. Friend aware of the latest and most sinister attack on parliamentary democracy by Leicester city council, which proposes to set up a research and development unit at a potential cost to the ratepayer of £135,000 to peddle Labour party propaganda, and to set up a contracts monitoring unit at a potential cost of £45,000? When can we expect to hear the results of the work of the Widdicombe committee, which should put a stop to this once and for all?

Mr. Biffen: My hon. and learned Friend might take comfort from the fact that an unsaleable product needs marketing on that scale. I shall take his other points into account.

Mr. Frank Cook: Would the Leader of the House direct his attention once again to the plight of the young homeless? Does he accept that his reply to my hon. Friend the Member for Houghton and Washington (Mr. Boyes) was inadequate? Although the list of exemptions was extended as a result of the statement earlier this week, the refusal to grant exemptions in Middlesbrough alone has caused 80 people to lodge appeals against those refusals. The appeals will take as long as four months to hear, and for those four months, those people will be without financial support. Therefore, they have already been judged, sentenced and executed. Does he accept that it is not good enough to push any reference to this matter to the fag-end of a debate on Tuesday evening or early Wednesday morning, and will the Government provide time to discuss the matter within the next nine days?

Mr. Biffen: The motion has been put down for debate on Tuesday evening. The matter requires the urgent consideration of the House, and I have no doubt that we shall have a good and hard-fought debate.

Mr. Andy Stewart: Will my right hon. Friend make time available for a debate on the report by the Select Committee on Agriculture on the Government's handling of the Aujeszky's disease eradication programme now that great hostility is being expressed by pig farmers.

Mr. Biffen: My constituency interest makes me aware of the point that my hon. Friend has made. It would be appropriate that the observations of my right hon. Friend the Minister of Agriculture, Fisheries and Food were made on the report before it was further considered by the House.

Mr. Simon Hughes: Will the Leader of the House consider granting time for a debate on arms sales to Third-world and other countries with military regimes which do everything that they can to deny human rights—especially as we learn today that despite the Government's protests that they urge the Government of Chile to uphold human rights, the right hon. Gentleman's hon. Friend, Lord Trefgarne, is entertaining 12 senior Chilean military people in Britain this week? They are to be received at four national institutes — the International Institute for Strategic Studies, the Institute for Defence Studies, the Civil Service College and the Institute of Latin American Studies, effectively as guests of the Government. Will the

right hon. Gentleman ensure that we can debate whether the Government's policy is to encourage dealings with and arms sales to Chile?

Mr. Biffen: I am sure that both sides of the House would welcome a debate upon that topic, because if the hon. Gentleman's speech were to be be delivered in those terms, many hon. Members would have great delight in rebutting it. There is no immediate time available for such a debate in Government time but the hon. Gentleman might like to try good luck with an Adjournment debate.

Mr. Nicholas Soames: Does my right hon. Friend share my anxiety for the Labour party, which appears to be running out of stamina? Does he agree that its performance last Monday—

Mr. Speaker: Order. Is the hon. Member asking for a debate?

Hon. Members: Yes.

Mr. Soames: I was trying to ask whether my right hon. Friend agreed that the Opposition are having too many days, and that they cannot cope with them. Could we have fewer so that they would be a more worthy foe?

Mr. Biffen: I may be ultra-cautious, but I think it imprudent for any Leader of the House to taunt the Opposition with running out of stamina just as we move into the month of July. We will have just about enough stamina to see us through to the appropriate rising time.

Mr. Dennis Skinner: Is the Leader of the House aware that if, on Wednesday, when we discuss the Sporting Events (Control of Alcohol Etc.) Bill which stops the sale of alcohol in certain places in England and Wales, he decided to stop the selling of alcohol in the Houses of Parliament and closed all the bars, he would not then be accused by people outside of saying what is all right for some people does not apply to those in the legislature? Does he believe that it would be a good idea if at 10 o'clock or whenever we have the vote, none of those people who have been in the bars from 10 o'clock in the morning could be accused of being a little weary and overtired?

Mr. Biffen: That is an interesting proposition. It could lie at the core of a fascinating speech to be delivered in the debate on Wednesday, when another Minister will have to answer.

Mr. Nicholas Winterton: As I have the great honour, privilege and pleasure of speaking in my right hon. Friend's constituency tomorrow evening, may I ask a small favour of him? Like many right hon. and hon. Members, I have asked for a debate on care in the community. I refer my right hon. Friend to early-day motion 515.
[That this House, noting the widespread interest in the issue of care for the mentally ill and mentally handicapped in the community following the publication of the report of the Social Services Committee on this matter, calls for an early debate on the recommendations and implications of this report.]
It is a matter of considerable anxiety and relates to a deserving group of people. Will he arrange a debate before damaging decisions are taken by regional health authorities which will prejudice the future care of such people?

Mr. Biffen: That is all very well, but my hon. Friend outlines a fairly fragile political situation. He is speaking in my constituency, and I am not prepared to give an answer until I see how he behaves in north Shropshire.

Mr. Robert Parry: In view of the recent tragic air disaster and the fact that yesterday armed forces were stationed at Heathrow, will the Leader of the House arrange an early debate or statement on security at British airports?

Mr. Biffen: I must confess that I do not have the ability to give a debate in Government time, but my right hon. Friends are keeping the matter under constant review and a statement will be made if appropriate.

Mr. Jerry Hayes: Now that Congress House has opened its doors to private enterprise by converting rooms to a restaurant, a theatre and a bar, would it not be appropriate to allow the Opposition an extra Supply Day so that they can further extol the virtues of the Government's privatisation policy?

Mr. Biffen: It is a fascinating thought, but at this stage of the year time is a precious commodity and some might think me flippant if I responded positively to my hon. Friend's suggestion.

Mr. Michael J. Martin: Weeks ago, when redundancies were announced at British Rail Engineering Limited in my constituency, the Secretary of State for Scotland promised that a consultative report would be produced. When that report becomes available, will the Leader of the House ask the Secretary of State for Scotland to arrange for a debate on the immense problems of Springburn? We have serious unemployment, drug addiction is the worst in the west of Scotland, many elderly people live in severely damp housing and very few new companies have opened up in the area. Yet at one time we had four railway workshops employing 10,000 people. Will the right hon. Gentleman ensure that there is a debate on the Floor of the House when the report becomes available?

Mr. Biffen: I very much appreciate the hon. Gentleman's constituency interest in this, and I will convey his request to my right hon. Friend the Secretary of State for Scotland.

Mr. Bill Walker: I wish to draw attention to early-day motion No. 789 about Arthur Bell and Sons, the excellent and profitable Scotch whisky company in my constituency.
[That this House recognises that Arthur Bell and Sons is a well managed Scottish company which, during a period of great difficulty, has continued to expand the sale of premium brand Scotch whisky; congratulates the management and the workers on the splendid results achieved; and believes that control of this fine Scottish company should not pass into non-United Kingdom hands.]
Is the right hon. Gentleman aware that there is great concern in Scotland that the bankers dealing with the Guinness takeover bid are also acting for Arthur Bell and Sons and that there is a feeling in my constituency that there has been skulduggery in smoke-filled rooms, which cannot be good for the city, for Scotland or for Arthur Bell and Sons? May we have an early debate on the subject?

Mr. Biffen: I am sure that my hon. Friend does not expect me to follow his remarks in any sense other than

to say that the matter is being considered by the Office of Fair Trading. There is a legal framework which must be observed.

Mr. Max Madden: In view of the interest in the Government's proposals to improve safety at football grounds and the need to know whether they intend to make any financial contribution, will the right hon. Gentleman arrange for a statement to be made before the Bill relating to this matter is introduced next week? Alternatively, will he give an assurance that the Ministers presenting that Bill will give some information about the progress of the working group set up some time ago under the Minister with responsibility for sport?

Mr. Biffen: I appreciate the significance of my hon. Friend's point. I will bring it to the attention of my right hon. and learned Friend the Home Secretary.

Mr. Tim Yeo: As Government inaction is as appropriate a subject for debate as Government action, is my right hon. Friend aware of the widespread dismay among many homeless people and unemployed people seeking to move house to find work at the Government's decision not to legislate in this Parliament to decontrol new lettings in the private rented sector? Does he envisage time being available for a debate on that important subject?

Mr. Biffen: My hon. Friend will appreciate that I cannot say anything about the possible contents of the Queen's Speech in the autumn, but I will bring his remarks to the attention of my right hon. Friend the Secretary of State for the Environment.

Mr. D. N. Campbell-Savours: What has happened to the statement on Lear Fan, for which I have repeatedly called in the past five weeks?

Mr. Biffen: We all have to learn to be disappointed. I am sorry that the hon. Gentleman feels that the Government have been remiss in not providing that statement. I will certainly draw the attention of my right hon. Friend the Secretary of State for Northern Ireland to the point.

Mr. Campbell-Savours: Once again.

Mr. Biffen: Yes, once again.

Mr. Peter Bruinvels: Does my right hon. Friend share my concern at the spiralling cost of running the House of Commons, which was £51 million in 1983–84 and £57 million in 1984–85? Is it really necessary to have a new telephone system costing £2,035,000? Will he also seriously consider timetabling the business of the House next week so that we finish by midnight each night from Monday to Thursday and thereby reduce expenditure which is getting out of hand?

Mr. Biffen: There is an old adage that the guillotine is a sharp cure for dandruff. I was reasonably tolerant about my hon. Friend's point until he suggested that there ought to be an automatic timetable for every evening next week. However, I am grateful to him for making the point that the costs of the House of Commons are rising sharply.

Mr. Malcolm Bruce: Will the Leader of the House find time for a debate on the army training establishments of the Ministry of Defence, in the light of the announcement yesterday by the Secretary of State for Defence of a reprieve for Crickhowell and the somewhat


misleading statement of the Prime Minister this afternoon? She implied that the Gordon barracks in my constituency have been reprieved. The barracks have been reprieved only as a TA base, not as a training centre.
Will not the Leader of the House acknowledge that we need a debate because of theo Ministry of Defence's argument that the reason for the closure of both barracks is that there are insufficient recruits in Scotland and Wales to sustain them? Scotland has twice as many recruits as Wales, yet the Government have not reprieved the Bridge of Don barracks in my constituency. Will the Leader of the House acknowledge that the only way that I can save it is to run under a bus, if there are any left after the Transport Bill becomes an Act?

Mr. Biffen: I will not respond to the invitation to comment upon the hon. Gentleman running under a bus, but his point is a particularly suitable one for him to try his luck in the Ballot for the Adjournment.

Rate Support Grant (Scotland)

The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I shall make an announcement about local authority expenditure and rate support grant in Scotland.
Scottish local authorities are planning expenditure in 1985–86 which is some £91 million or 3·2 per cent. above the guidelines that I issued to them. When I met the Convention of Scottish Local Authorities on 24 June, I said that I was disappointed that despite my warnings that grant penalties would be more severe than last year, local authorities continue to plan for significant overspending. The total of local authority budgets is still above the 1984–85 outturn in real terms and is 1·8 per cent. above expenditure in 1978–79. Given the continued overspending, I have decided that for 1985–86 the total penalty would be £126 million. I will lay the necessary rate support grant Order shortly and grant reductions will start on 10 July. I have today placed in the Library a paper showing how the abatement will affect each local authority, and letters of notification to them are being posted today. The penalties are on a tariff which starts at a grant loss of 70 per cent. of overspend, rising to a grant loss of 90 per cent. of overspend for a 1 per cent. excess over guideline and 110 per cent. for a 2 per cent. excess. At 2·5 per cent. the rate of penalty is 120 per cent. and then steepens to 140 per cent. at 3 per cent. and 170 per cent. at 3·5 per cent. excess and above.
While these severe penalties have been necessitated by the continued overspending of some local authorities, no authority which is planning to spend at guideline will suffer a penalty, and I am glad to see that this year 30 local authorities will avoid penalties by budgeting within guidelines. I very much hope that the remaining authorities will reduce their expenditure to guideline and thus eliminate their penalties, to the benefit of their ratepayers when penalties are recalculated at outturn.
When I announced the penalties for 1984–85 I said that, in response to representations from the convention, penalties would be adjusted in the light of outturn to give incentives to authorities to respond to the grant abatement. Authorities bringing their expenditure within guidelines would have their penalties cancelled. Those reducing their overspending would have their penalties reduced. When I met the convention on 29 April it asked that this adjustment should first be made on the basis of provisional outturn. When I saw the convention on 24 June, I told it that I was able to agree to this suggestion. An initial adjustment of penalties on the basis of provisional outturn will be made for the first time in Scotland this year. The 1984–85 penalties will be further adjusted in the light of audited final outturn about January.
I am glad to see that 13 authorities subject to penalty on their 1984–85 budgets have brought their expenditure within guideline at provisional outturn and will have their penalty cancelled unless final outturn figures show them to be above guideline. The repayment of penalties will obviously be of benefit to ratepayers. Most other authorities subject to penalty have reduced their expenditure and will have some repayment of penalty under the new arrangements introduced last year. I am sorry to say that nine authorities have increased their spending and will have increased penalties. The total


amount of penalties to be repaid in respect of 1984–85 is £29 million. Overspend for 1984–85 is still — at £77 million—too high.
There is no need for authorities to lose grant and it is in the interests of their ratepayers to spend at guideline. I hope those who have not budgeted at guideline for 1985–86 will bring their expenditure to guideline at outturn.

Mr. Donald Dewar: It is sometimes easy to lose sight of the enormity of what the right hon. Gentleman is doing in the welter of detail that he provides. Last year the excess over guidelines was £114 million and penalty £90 million. This year the excess is £91 million — a very considerable improvement according to the terms of reference of the right hon. Gentleman—but the penalty is to be £126 million. Even if we exclude Edinburgh, where there are complicating factors, the excess is £74 million and the penalty will be £117 million.
Can the right hon. Gentleman say why, for the first time, he has thought it necessary to impose what can only be described as punitive fines, which are based neither on justice nor on logic? There is no pretence that the Secretary of State is trying to ensure that the guidelines are met. It is a vendetta, with stinging penalties for any local authority that does not bow the knee to his personal diktat. How does he justify this when local authority budgets between 1984–85 and 1985–86 increased by only 4 per cent., which is well below the rate of inflation? Will he tell the House whether the comparable abatement in England and Wales for 1985–86 will be weighted in a similar way, with a clawback of more than £1 in the pound, or whether this is a particular form of torture that he has devised for Scottish local democracy?
Has the right hon. Gentleman considered the impact upon individual local authorities? For example, in Strathclyde the excess over guidelines in 1984–85 was £50 million and the penalty £38·5 million. This year the Strathclyde excess will be £41 million—£9 million less than last year—but the penalty will be increased from £38·5 million to £67·5 million, the equivalent of 5p on the rates. According to my calculations, the penalty is 165 per cent. of the excess over guidelines. Even if there were merit in the guidelines, which is a matter of considerable controversy, there is no case for imposing an additional penalty of this kind. Can the right hon. Gentleman say why the hard-pressed councillors of Strathclyde should be expected to make a saving of this kind in this financial year? How many teachers does he think will have to go to the wall, how many home helps, how many occupational therapists—

Mr. Albert McQuarrie: And social workers.

Mr. Dewar: Yes, and social workers. Unlike the hon. Member for Banff and Buchan (Mr. McQuarrie), I do not think that the term "social workers" is an insult. They do a useful job. An authority such as Strathclyde cannot find £67 million at the fag end of the year. This announcement will result in an unreasonable and unreasoning butchery of local government services.
Last year the excess in Central region was £4 million and the penalty £3 millon. This year the excess is slightly down—about £4 million—but instead of £3 million the penalty will be £7 million. Does the right hon. Gentleman

expect to be thanked by his political allies in Lothian region, which in 1985–86 has an excess over guidelines of £7·5 million and which will be asked to pay a penalty of £8·8 million? In other words, Lothian region will be brought below the already completely inadequate guidelines that have been set by the Secretary of State. Lothian is not unique. Tayside is in exactly the same position.
What about some of the hideous complexities that will now face Edinburgh district council? The right hon. Gentleman seems determined to throw everything at the situation, including the kitchen sink—[HON. MEMBERS: "Too long."] Will he confirm that Edinburgh will be deprived of the entire needs element of its rate support grant settlement? Even if it meets his demands—because of the right hon. Gentleman's allegation that its spending is excessive and unreasonable — and makes cuts of £16·3 million, it will still be faced with more than £1 million in penalties as a result of this announcement.
Does the right hon. Gentleman accept, as any fair-minded person would, that his announcement is a recipe for chaos and that he is deliberately creating confrontation while at the same time parading around Scotland lamenting and complaining about the very crisis for which he is largely responsible? Even now, at this late date, will not he make some contribution to settling a difficult and dangerous situation by abandoning what amounts to no more than a pointless and punitive campaign against local democracy in Scotland?

Mr. Younger: To hear the hon. Gentleman, one would think that all this was complete news to him. But he knows perfectly well that last year the huge gap between what local authorities were planning to spend and our provision was met half way by an extra £98 million that was found by the Government. At that time I clearly said that, as part of that, the penalties would be much more severe this year. What is more, I have said that every time I have met the local authorities and I have also said it in public. Therefore, no one should be surprised that the penalties are much more severe.
The hon. Gentleman described the penalties as fines. That is not correct, because authorities can get this money back by bringing their spending down at outturn. Indeed, quite a number of authorities that suffered penalties last year have now got some money back. That will either reduce the net effect of these penalties or in some cases will wipe them out altogether. In England and Wales, the reverse of what the hon. Gentleman said is the case. The highest levels of penalties in England and Wales are far higher than in Scotland. The highest is 300 per cent. of overspend, which is much more severe.
The penalty for Strathclyde is large because it is a large authority with large expenditure. Although the penalty is up this year, that masks the fact that Strathclyde will get some money back from the penalty that it was scheduled to pay last year because it has brought its expenditure down at outturn. It is not all that difficult for Strathclyde, but I accept that it is not easy.
As to the time of the year, the hon. Gentleman might have mentioned the fact that we have managed to make the announcement considerably earlier. Last year's announcement was made well into July. I hope that this earlier announcement will be helpful.
Edinburgh is in a unique situation. I confirm what the hon. Gentleman said, that as things are going at the


moment, Edinburgh will come out of grant altogether. But it will get that back if it brings its spending down to anywhere near guidelines. I have merely asked Edinburgh to go 3 per cent. above guidelines in the order that I propose to bring forward. But it is interesting to note, such are Edinburgh's extraordinary spending plans, that, had the penalty been 60 per cent. rather than the higher figures I have mentioned, it would still have lost rate support grant this year, given its planned level of overspending. Edinburgh is in a totally different situation, and I urge everyone in Edinburgh to think again before they do real damage to the city.

Several Hon. Members: rose—

Mr. Speaker: Order. I must bear in mind that this is an Opposition Day. A large number of hon. and right hon. Members wish to take part in the subsequent debates, and there is also an application under Standing Order No. 10. I am anxious that questions on this statement do not continue much beyond 4.30 pm. Questions should therefore be brief.

Sir Hector Monro: Will my right hon. Friend accept that he is absolutely right to implement the grave warnings that he has given over many years? Does he also agree that some local authorities, such as Dumfries and Galloway, have, through prudent budgeting, kept within the guidelines and deserve credit for doing so? In next year's formula will he consider some incentive for those authorities that have kept within guidelines this year so that they benefit from their prudence?

Mr. Younger: I am very grateful to my hon. Friend. It is worth pointing out that even those authorities that have kept within guidelines have had to work extraordinarily hard and have had to make very difficult decisions to do so. I hope that they will be duly regarded for the contribution that they have made. We shall be looking at ways of ensuring that they are not penalised for their care and responsibility.

Mr. Bruce Millan: Are not these outrageous penalties just another part of this dishonest charade that we have had from the Government every year? They have laid down completely unrealistic guidelines and have pretended that they can be reached, when the Secretary of State well knows that they cannot. They have now come forward with these penalties that are a burden on the ratepayer. Will the right hon. Gentleman stop talking about penalties on local authorities, because these are penalties on rates and services? They expose the hypocrisy of the Secretary of State posing as a friend of the ratepayer. He provided an ostensible £50 million of relief for domestic and commercial ratepayers, reduced that to £30 million, and, as a result of this announcement, has taken away £100 million more than he is giving in the current year.

Mr. Younger: The right hon. Gentleman is quite wrong. It is extraordinary that he should say that guidelines cannot be reached when 30 Scottish local authorities are now planning to do just that. He might also note that the guidelines are in some cases above the needs assessment. As for a charade, he will recall that when he imposed penalty, it was completely unfair and bore no

relation whatever to the amount of overspend by particular authorities. That we have put right, and now the penalty at least bears a fair relationship to overspend.

Lord James Douglas-Hamilton: Was not the Edinburgh district council Labour group fully warned about the consequences of its actions? Much more important, will my right hon. Friend strongly emphasise to those Labour councillors that if they reduce spending to within guidelines they will again be entitled to grant?

Mr. Younger: I certainly confirm what my hon. Friend has said. Edinburgh's course is beyond understanding, particularly when it has been asked to achieve a figure that is quite a long way above guidelines. Edinburgh is being treated very well.

Mr. Donald Stewart: Is the right hon. Gentleman aware that the so-called guidelines are simply his arbitrary figures so that he can act in accordance with Treasury diktat? Is he aware that any kudos he received for the £50 million repayment, later massaged to £30 million, will disappear when the ratepayers feel the effect of this massive piece of political chicanery?

Mr. Younger: The right hon. Gentleman might have been well advised to wait until he saw the figures, when he will find that the Western Isles does rather better out of this change than he might have thought.

Mr. John Maxton: Exactly how many local government jobs does the right hon. Gentleman expect to be lost as a result of his announcement? Does he not agree that the local authorities he is penalising have a much better mandate than he has to govern the people of Scotland?

Mr. Younger: I do not expect that this will lose nearly as many jobs as would be lost if spending were allowed to get out of control. That is what I am trying to prevent.

Mr. Nicholas Fairbairn: Will my right hon. Friend accept my congratulations on fulfilling the punishment of extravagant sinners, but will he remember that forgiveness is also part of the treatment of sinners? One of my sparse virtues is an ability to understand the English language. I understand what an assessed need is, but not what a guideline is. It is absurd that a frugal council such as Perth and Kinross should have a guideline that is £1·2 million below what the Scottish Office has assessed as its need, whereas in extravagant Edinburgh the guideline is 10 per cent. above assessed need. Cannot we change such a mad system?

Mr. Younger: I appreciate what my hon. and learned Friend has said. As I have told him, we are looking hard to see whether we can get a more accurate calculation of guideline in the future. I sympathise with him on that point. I agree with what he said about the repentance of sinners, but they must repent before one can forgive them.

Mr. Norman Buchan: Surely nothing extravagant has been done by any of these authorities. Much of what they have done has been caused by the duties imposed on them by central Government and the central Government cuts from which they have suffered. How much longer will we see our urban services in particular run down under this Government? What will happen to the marvellous and massive private housing improvement in Glasgow, for example, which has now stopped in midstream as a result of these punitive


measures? This is part of the problem facing local authorities, and the Government will go down in shame for having halted these things.

Mr. Younger: The hon. Gentleman is quite mistaken in thinking that there is any effect whatsoever on housing improvement in Glasgow. That comes under the Housing Corporation, which has been very generously funded by the Government. As to the statement that none of these authorities has indulged in any extravagance, the credulity of the people of Edinburgh will be stretched beyond belief if they read that the hon. Gentleman has said that.

Mr. Albert McQuarrie: I congratulate my right hon. Friend on the method that he has adopted to ensure that the high-spending authorities are penalised when levying these undue charges against the ratepayers. Will my right hon. Friend accept, however, that rural areas and places such as Banff and Buchan district council and Grampian regional council have found it difficult to keep to his guidelines, but nevertheless have endeavoured to do so? I sincerely hope that the work that they have put in will be found to be of benefit when they realise what local authorities will enjoy in abatement.

Mr. Younger: My hon. Friend is absolutely correct in that. Indeed, he is being unduly modest because he will find, when he sees the figures, that not only is Grampian within guidelines and has no penalty, but Banff and Buchan has some money back from the penalty that it would have had to pay last year because it has got its spending within guidelines.

Mr. Robert Hughes: Surely the Secretary of State is aware that not one single local authority in Scotland believes his guidelines are fair and provide the kind of finance needed for a local authority to supply services to ratepayers. Not even Grampian regional council, or Banff and Buchan district council, has a good word to say about the guidelines. Will he not take that into account? Secondly, he seems to express some surprise that there should be outrage on the Opposition Benches because we knew that this statement was coming. I tell the right hon. Gentleman that somebody who is sentenced to be hanged knows that capital punishment is coming, but that does not make it any the more palatable when it finally arrives.

Mr. Younger: I should have thought then, with that last point in mind, that such a person would not commit the crime in the first place if he could avoid it.
Aberdeen still has some penalty to pay, but the hon. Gentleman may be reassured to know that it will be getting back some of the penalties that it incurred last year because it got its spending down nearer to guidelines.

Mr. Michael Forsyth: Does my right hon. Friend not agree that, if there is any hypocrisy in this matter, it lies with those Socialist councils in Scotland that are bleating about having to cut services because of cuts in rate support grant which they have brought on themselves by having chosen to spend millions of pounds on supporting striking miners, giving money to CND, sending councillors on trips to eastern Europe and elsewhere and many other extravagances, in the sure and certain knowledge that not only would the ratepayers have to pay but they would lose grant and incur penalties as a result?

Mr. Younger: Yes, I certainly agree that some of the things on which such councils as Stirling are spending money are almost beyond belief. My hon. Friend will agree with me, I am sure, that, while these authorities seem to enjoy putting on the crown of the great overspenders, they do not like it when there is some penalty as a result. They should realise that one goes with the other.

Mr. Norman Hogg: I understood the Secretary of State to say in reply to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) that relevant expenditure was to be increased by £98 million. Surely this does not meet inflation, and, since local authority expenditure has risen by only 4 per cent., it represents a cut in real terms.

Mr. Younger: That is not quite the point that I was making. I was saying that there was initially a gap of about £200 million last year. I moved just about halfway to make it easier for local authorities. In return, I expected them to do better, and I warned them that there would be severe penalties. The hon. Gentleman may be pleased to know, however, that his local authority will get some benefit from the changes in the order.

Mr. Gerald Malone: I am grateful to my right hon. Friend for announcing earlier that Aberdeen district council would get a refund of penalty on 1984–85. Is that not the best possible incentive for it to remain within guidelines this year and to make every effort to ensure that its expenditure is reasonable?

Mr. Younger: My hon. Friend is absolutely right to say that it is a tremendous incentive. It compares very much with the previous system, which meant that authorities got completely indiscriminate penalties related only to their proportion of rate support grant, which often bore no relation to the amount of overspending that they had incurred.

Mr. Robert Maclennan: Is it not the case, whether or not local authorities in Scotland have met their guidelines, that they are virtually united in regarding the system of guidelines and penalties as being operated with gross unfairness? Is it not also the case that, after six years as Secretary of State, the right hon. Gentleman has wholly failed to protect ratepayers from overspending local authorities, has failed to promote local accountability and has failed to develop a system that is comprehensible to anyone?

Mr. Younger: I have been used for years to the "on the one hand, on the other hand" speeches of the SDP, but to call for freedom for local authorities to spend what they like and then to criticise me for not curbing overspenders is beyond even me.

Mr. Bill Walker: Does my right hon. Friend agree that the whole problem of local authority expenditure began way back, before the general election of 1979, when the compact that existed between local authorities and Government worked? It broke down during the winter of discontent in the late 1970s, and, sadly, the expenditure base from which the prudent authorities began under guidelines meant that, as the years went by, the prudent authorities found it much more difficult to maintain the guidelines. Those that have deserve rewards. I should have liked to see more rewards for those authorities that had been good and even steeper penalties


for those that had been bad. Being good has not been an adequate reward, and it is time that we got rid of the whole system.

Mr. Younger: I appreciate my hon. Friend's last point. It is desirable that those who have made the very difficult efforts necessary to keep within guidelines are rewarded. I think that the system now is very much fairer than it was. My hon. Friend is right in referring to this as a longstanding problem. I am afraid that the honour still falls to the Opposition, when in power, of having—in 1976—made the biggest-ever cut in one year.

Mr. David Lambie: As a Strathclyde Member of Parliament, I wish to add my protest to those of my right hon. and hon. Friends as this vicious attack on the ratepayers of Strathclyde. Is the right hon. Gentleman aware that Cunninghame district is the unemployment black spot in the United Kingdom, with every third man unemployed? Is the Secretary of State further aware that Cunninghame district council is known as a responsible authority, one which not only carries out good housekeeping now but has done so in the past? Why should we suffer further when we have done well in Cunninghame and have tried to keep to the Government's guidelines? Why should we be penalised?

Mr. Younger: I do not always agree with the hon. Gentleman or with Cunninghame district council, but in this case it has had a much fairer deal because on this occasion it is getting back some money and is a net gainer from these changes.

Mrs. Anna McCurley: Does not my right hon. Friend think that it is time to consider a new system to prevent this annual wrangling of an auction every year, which makes it very difficult for councils to organise their budgets, particularly when the budgets are affected halfway through the year?

Mr. Younger: My hon. Friend is absolutely right to say that making these changes in the middle of the year is extremely difficult. That is why I have been pressing local authorities to do this much earlier—in fact, long before the year starts. Some of them did so and some of them did not. My hon Friend will be glad to know, however, that Inverclyde council is one that will be getting back some penalty as a result of the savings that it has made.

Mr. Gavin Strang: Is the Secretary of State aware that the brutal cut he is trying to impose on Edinburgh amounts to an attempt to make a complete mockery of the decision of the Edinburgh people to elect a Labour council, and will do real damage to the level of services and to housing provision in Edinburgh? Will he admit that the 15·7p rate that he is trying to impose on Edinburgh is precisely the rate that was moved unsuccessfully by the minority Tory group last March, and that he has made no attempt to acknowledge the successful 22·7p rate moved by the majority Labour council?

Mr. Younger: The hon. Gentleman must know, as does everyone on Edinburgh council, that the council has deliberately and openly—it has been quite honest about it—set out to bust every one of the rules and regulations governing dealings between central and local government. If it does that, it must expect the normal methods to be

used. I hope that, in the interests of the ratepayers of Edinburgh, it will now get its spending down. After all, all that I am asking it to do is to cover the huge growth in spending which it has instigated. There is no question of ordinary services being affected.

Mr. James Hamilton: Does the right hon. Gentleman recognise that my district council is operating within the guidelines? However, that does not deter the council from stating that this is the worst Government in history when it comes to looking after the interests of local government. Will the right hon. Gentleman take cognisance of the fact that, if Strathclyde works within the guidelines, there will be serious cuts in social services? Because of the clawback that will be imposed on the council, the right hon. Gentleman will not be able to fulfil his promise on Tuesday that the teachers would be taken care of with an increase in rate support grant.

Mr. Younger: I appreciate what the hon. Gentleman says about his local district authority. I applaud the council for coping with its difficult task in operating within the guidelines. Of course it is not easy for a large authority like Strathclyde district council to get its spending quickly down to the guidelines. However, I have urged the council to do so for six years. If the council had started to act earlier, it would have found it much easier to get within the guidelines.

Mr. Malcolm Bruce: Will the right hon. Gentleman accept that my colleagues and I do not approve of or support Socialist councillors accused of breaking the law, even though we may disagree with the Government's choice of guidelines? We believe that the position in Edinburgh warrants some flexibility from the right hon. Gentleman, and not law-breaking by the council. Will the right hon. Gentleman acknowledge that, following the rates debacle last month, the Scottish people know how much the Government are responsible for forcing up rates? They will see this decision as a further move by the Government to force up rates and consequently to cut services next year. In those circumstances, will the right hon. Gentleman undertake to ensure that the £126 million penalty which he is now clawing back will be handed back directly to Scottish ratepayers?

Mr. Younger: I am grateful to the hon. Gentleman for his clear statement about giving no support to lawbreaking. I hope that that statement will be noted in all quarters. However, the hon. Gentleman's remarks about overspending were quite off beam. I thought that he would have been thoroughly pleased that his district local authority and regional local authority have avoided any penalty. Surely he must feel, therefore, that this penalty system is much fairer than the one that operated before the Conservative party came to power.

Dr. Norman A. Godman: I am pleased to hear the right hon. Gentleman's positive reference to Inverclyde district council. Has he calculated the number of teachers' jobs that may disappear because of these penalties and other proposed cuts?

Mr. Younger: It is for the local authorities to decide the details of the cuts. The provision that the Government have made allows, in general, local authorities to provide teachers up to full Red Book standard, plus an extra 6 per cent. to allow for curriculum development. If local


authorities are already employing many more than that, they may have to reduce the numbers to make some savings. The provision is certainly perfectly adequate.

Mr. Fairbairn: On a point of order, Mr. Speaker. The documents that the Secretary of State promised the House would be in the Library are not available. It is difficult for Back Benchers to frame their questions when the information about which they are either going to cheer or complain is not available.

Mr. Younger: Further to that point of order, Mr. Speaker. If that is the case, I shall look into it at once and make sure that hon. Members get that information as quickly as possible.

Mr. Millan: Further to the point of order, Mr. Speaker. Is this procedure not an abuse of the House? The Front Bench at least should have these details instead of having to rely upon details in the Library. The Secretary of State has information that is denied to the rest of the House. This information is not included in the statement.

Mr. Robert Hughes: Further to that point of order, Mr. Speaker. The Secretary of State has refused to answer any supplementary questions. He has simply looked up the figures and said that the hon. Gentleman or the hon. Lady "may be pleased to know" that his or her authority has received some sort of benefit. If the right hon. Gentleman is going to abuse the provisions of a statement in this way, he should at least ensure that a copy is available, not only in the Library but in the Vote Office, so that hon. Members may study the figures and have a sensible question and answer exchange.

Dr. Godman: Further to the point of order, Mr. Speaker.

Mr. Speaker: Order. I want to call the Front Bench soon.

Dr. Godman: The problems faced by Back Benchers in these circumstances are worsened by this lack of information, especially when figures and percentages are bandied about between the two Front Benches. Back Benchers are in a difficult enough position. They should be provided with the information that is necessary for them to ask good questions.

Mr. Speaker: The hon. Member's point rings a chord with me, but this is not my responsibility. The Secretary of State is responsible for placing papers in the Library.

Mr. Jim Craigen: As this Front Bench speaker does not have the detailed abatement figures either, I ask the Secretary of State to spell out some of the details concerning certain authorities, because hon. Members are faced with great difficulties when their authorities are affected and they do not have full details.
Why, when the total budget is to increase by less than the rate of inflation, does the right hon. Gentleman propose to unleash this chaos on Scottish local government? The right hon. Gentleman has not yet given details of the staffing cuts that will be necessary for the remainder of the current year to fulfil the proposed guidelines. Has Edinburgh already received £2·5 million of the needs element in RSG? Does the right hon. Gentleman propose taking that money away from the council? If so, how will he do it? Why is the right hon. Gentleman conducting this frenzied attack on Scottish local authorities, the ratepayers and the services that are provided in these areas? Why does he continue to give us these bland assurances that he has the interests of Scotland's ratepayers at heart when, in fact, COSLA representatives must have given him a roasting the other day when he met them? Perhaps the Secretary of State would like to tell us what the COSLA representatives said this morning when he consulted them about these outrageous proposals.

Mr. Younger: Talking about strange roles, the hon. Gentleman's role as the supporter of ratepayers is pretty odd in view of the fact that he is a greater supporter of overspending councils than anyone. 
I gave instructions that the information should be made available in the Library, which was asked to release the information. I shall of course look into the matter. I very much regret any shortcoming in the provision of information for hon. Members.
The proposed spending for the coming year is not increasing as much as the probable rate of inflation, but the spending must be related to what the country can afford. If that is not done, worse things might befall us. No business or family anywhere in Britain has a guarantee that what it spends next year will be fully uprated for inflation. The public sector cannot be guaranteed in that way.
An over-provision had already been made to Edinburgh, and we are considering the best way to rectify that position.

Rate Capping (Lambeth)

Mr. John Fraser: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the consequences of rate capping in Lambeth.
Those consequences are specific and immediate because today 31 Labour councillors and one former Labour councillor have received information from the district auditor of an immediate surcharge of £126,947 for loss of housing benefit and loss of what is called "Crown contribution in lieu of rates" together with the threatened loss of further massive sums by way of surcharge, possibly as high as £750,000. Today, the municipal equivalent of the rack and thumbscrew have been wheeled into Lambeth to threaten councillors with bankruptcy and disqualification. This process is conducted on a presumption of misconduct, not of innocence.
This matter is important because, whatever side one takes in the controversy, rate capping is indisputably a device to force councillors to depart from their promises, principles and consciences and to change — at least temporarily—through an unelected district auditor, the political control of the council.
The matter is urgent because, once the surcharge is raised, there can only be a matter of days during which an objection can be lodged and an appeal made to the High Court. Once that happens, the rules of order of the House could remove from discussion in this Chamber the predicament and problems faced by Lambeth.
It is urgent, too, because the consequences of today's decision and the logical conclusion would mean massive redundancies, cuts and the subversion of a democratically elected council in a borough with the highest unemployment, the highest number of unfit dwellings and almost the highest crime rate in London, and many other very high indices of deprivation.
A debate would allow the Government, even at this late stage, to recognise their responsibilities, admit the amount of money that they have deprived Lambeth of and avoid the damaging consequences of this current confrontation.
I ask you, Mr. Speaker, to rule that this application should take precedence over the orders of the day so that these matters may be discussed in the House and the House may assert that intimidation and presumption of guilt have no part to play in the process of democracy whether at central Government or local government level.

Mr. Speaker: The hon. Member for Norwood (Mr. Fraser) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the consequences of rate capping in Lambeth.
I have listened with great care to what the hon. Member has said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10 and I cannot therefore submit his application to the House.

Opposition day

[17TH ALLOTTED DAY]

Mr. Field: I make no excuse for the poor attendance of Labour Members. Even if they are in Committees, it does not excuse their constant poor attendance on social security issues which are of such vital importance. The more we say that, the more chance there is that the powers that be will take note and persuade Labour Members to attend debates, even though they do not wish to speak.

Mr. Campbell-Savours: Will my hon. Friend accept that he is being a little unfair? My hon. Friend knows that there are Committees meeting in the House today and, indeed, every day, which hon. Members must attend. It is not that these debates are any less or more important than those in Committee. Hon. Members cannot be in two places at once. My hon. Friend only aggravates the problem further.

Mr. Field: Not even Labour Members can be in two places at once.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. This is a short debate. The hon. Gentleman must not get carried away with sedentary interventions, which delay the debate.

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. It ill becomes hon. Members such as the hon. Member for Macclesfield (Mr. Winterton), who has just returned from a swanning trip to South Africa, to complain about the absence of Labour Members from the House.

Mr. Deputy Speaker: The hon. Gentleman knows that that is not a matter for me. I must say that running commentaries from a sedentary position do not help the debate.

Mr. Frank Field: You were right to reprimand me, Mr. Deputy Speaker, but I hope that the point will have been taken by Labour Members.
When the Government set up their reviews of the social security system they were going to invite me to give evidence. But when the Minister of State realised that not much attention would be paid to the evidence, that invitation never materialised. Had I given evidence to the committee, I would have put forward the option of taxing child benefit. Although I wish to see a massive increase in child benefit, as my hon. Friend the Member for Oldham, West (Mr. Meacher) wishes, taxation on child benefit is an option that we should consider without such an increase. Although there are difficulties with such a policy, it would fulfil many of the Government's objectives vis-à-vis family policy. The Government say that they wish to target benefit on the poorest. If we tax child benefit, we shall have an effective targeting policy without any of the take-up problems. Most families with children have a tax threshold above the supplementary benefit level, so we would not be clawing back off the poorest in work. We would be taking from those paying the higher rate of tax. Those on the standard rate of tax would not be worse off, and the gain from that policy would be concentrated on the poorest. That would be an effective targeting policy.

Mr. Edward Leigh: There is a further option upon which the hon. Gentleman might want to comment—converting child benefit to a tax allowance.

Mr. Field: I shall not follow up that remark because this is a short debate and I should like to see a complete change of tax allowance policy. I believe that we should be moving towards phasing out tax allowances so as to reduce tax rates, but this is not the time to develop that argument.
There are two difficulties with the policy that I have suggested. One is that we should be transferring income within the household. The increased tax would be paid largely by males in work and the money would go to women. Some would see that as a disadvantage and if one were in government one might say that it is a disadvantage. Those of us who wish to see the position of women in our society strengthened would no doubt see it as an advantage.
Another disadvantage is that under the rules for taxing income, that change would mean that the child benefit of those on supplementary benefit would be liable to tax. I suggest that if the Government made such a proposal, they should exempt from tax the child benefit of those on supplementary benefit. At one stroke that would give the Government one of their other objectives—the creation of a family premium within the supplementary benefit system—without creating new administration.

Mr. Favell: I am most interested in what the hon.

Gentleman is saying. He has gone a long way towards dealing with the point that I raised with him earlier. The only problem with his suggestion is that taxing child benefit would lead to people being taxed twice. They would be taxed once to provide the money and then taxed on the benefit in the hands of the wife. Could he deal with that problem?

Mr. Field: I cannot deal with it, because I do not fully understand the hon. Gentleman's point, and if I give way again it will delay the debate.
The Secretary of State raised a further objection to that proposal—that the policy would lead to a lowering of the tax threshold. It would be useful if we could make some changes in the language that we use in approaching these debates. While the policy would lead to a change in the tax threshold, it would not lead to a change in the effective tax-free income. Both sides of the House must stop playing the game that when they are in opposition they score points by saying that tax thresholds have been lowered when the tax-free income has been increased and, vice versa, when they are in office. Equally, we need new ways of approaching our categories of public expenditure. If we pay the money as child benefit it appears as public expenditure, but if it is paid as a child tax allowance it does not. The same resources are being used, yet the amount appears differently in the public expenditure accounts. It is marked as a plus or a minus depending upon where one
This is an important debate. Its importance is not completely matched by the number of hon. Members present, but it is matched by the interests of those hon. Members who are in the Chamber. We have reached a watershed in the child benefit debate especially in view of the reaction from the Conservative Benches. That must be taken on board. If there is so little support for increasing the universal benefit in line with tax allowances those whose interests have been to see the furtherance of the benefits must regroup and rethink their position. I am suggesting one avenue of advance which would lead to a considerable increase in the cash payment going to women. It would achieve some of the Government's other objectives on targeting and a family premium within the supplementary benefit system and, above all, it would concentrate resources on the poorest — those in our society who earn poverty wages.

Mr. Charles Morrison: Like the hon. Member for Birkenhead (Mr. Field), I acknowledge and welcome the uprating of benefits announced by my right hon. Friend last week. I do not claim even a fraction of the hon. Member's knowledge of social security, but I share his anxiety about child benefit. I hope that my right hon. Friend will forgive me if I say that I am a little perplexed. He reiterated several times this afternoon that child benefit is important, but it seems to me that we are working ourselves into a position in which we believe and say one thing and do another.
We have already been reminded this afternoon of how my right hon. Friend's predecessor said that the Government were committed to the child benefit system and that, subject to economic and other circumstances, child benefit would be uprated each year to maintain its value. The Government constantly remind us of the improvements in our economic circumstances, yet they are now cutting child benefit.
My right hon. Friend the Prime Minister has more than once emphasised the value and importance of child benefit. Many times before today, my right hon. Friend the Secretary of State has done likewise, yet the Government are increasing child benefit by only 2 per cent., in the face of an inflation rate of 7 per cent. Furthermore, they are doing that not just in the face of their former statements but in the face of a great deal of support from elsewhere for the maintenance of the level of child benefit.
The Child Poverty Action Group brief has been referred to. I find it extremely helpful. Among other things, it referred to the view of the Policy Studies Institute which, I think, is accepted to be a reasonably objective organisation. The institute has concluded that the most efficient mechanism for directing more help to poorer families is an increase in child benefit.
Again, we have been told that apparently no fewer than 38 voluntary organisations have written to my right hon. Friend the Prime Minister complaining about a cut in child benefit. We have also been told about the recent MORI poll which showed that 75 per cent. of mothers said that child benefit was "essential" or "important" for providing for the needs of their children, and that 77 per cent. of mothers said that it was "essential" or "important" as a regular payment paid directly to them.
I received a letter today from the chairman of a committee in my constituency which represents numerous organisations. The lady wrote:
The Committee are shocked at the proposed minimal rise in Child Benefit when compared with the rate of inflation and the increases to other similar benefits.
The lady expressed disgust in support of those whose families are struggling to survive on low incomes or unemployment benefit.
The views of the Conservative women's national committee have already been described, but it is important that my right hon. Friend the Secretary of State should remember them. That committee stated:
We recommend that, as economic circumstances permit, child benefit is increased in line with increases in tax allowances or at least protected against rising prices.
The Government are doing neither. I know that my right hon. Friend has said that one-parent benefit will be increased by the full 7 per cent., that family income supplement will be increased by more than 7 per cent. to provide extra help—that is welcome—and that some other family benefits will be similarly improved. However, we have been informed that only 16 per cent. of the £175 million saved by not adjusting child benefit fully in line with inflation is being used to improve benefits for low-income families.
Thus, I hope that my right hon. Friend will forgive me for saying that I am a little perplexed. The Government position seems perverse in the face of their earlier commitments and in the face of public opinion. Their position even seems perverse in the face of the Government amendment which praises child benefit. Indeed, after my right hon. Friend's speech today the Government's position appears perverse in the light of his own remarks.
The amendment seems to suggest that the cause of the Government's proposals for uprating child benefit so inadequately is the Government's recent review of social security. That review has a great deal to commend it and it has a commitment to the continuation of child benefit, but it is only at the Green Paper stage. The Government should not anticipate the ultimate results of that until a new

system is agreed by the House. The Government should maintain the best of what exists in our present social security system, and that includes a properly uprated child benefit.

Mr. Archy Kirkwood: Like the hon. Member for Devizes (Mr. Morrison), I am perplexed, and I think that the Government have taken a slightly perverse step in making this cut in the increase in child benefit.
I listened carefully to the Secretary of State. I agree with the hon. Member for Birkenhead (Mr. Field) that the £2 billion increase in the budget, which is not an inconsiderable sum, was virtually a statutory duty, so the Secretary does not get many brownie points from me for making great play of that. The more I listened to the Secretary of State, the more I concluded that the reason why the child benefit increase was being cut was that the uprating forced upon the Government actually cost more than they had budgeted for.
There is a world of difference between saying that the cut was a policy change due to retargeting and redirection, and saying that the budget increase of £500 million—I believe that that was the Secretary of State's figure—had not been expected. I suspect that the real cause is the unexpected increase in the uprating figure over the budgeted figure.
Hon. Members should know what really happened. It is a curious coincidence that yesterday, a short time after the cuts in the increase in child benefit were announced, the Chancellor of the Exchequer reaffirmed his determination to get extra room for tax cuts. I do not follow the hon. Member for Oldham, West (Mr. Meacher) any further down that road, but there is enough evidence to make me suspicious of the Government's motives in failing fully to index the child benefit increase. I hope that right hon. and hon. Members will follow my lead when we vote tonight.
How does the Minister intend to redeploy the resources saved? Is the figure provided by the Child Poverty Action Group correct, as quoted by the hon. Member for Oldham, West, that only 16 per cent. of the £175 million saving from child benefit is to be used to improve benefits for low-income families?
I welcome these changes. They are a step in the right direction. The Secretary of State will know that in the last Budget we took the very hard decision that where there were scarce resources there might be a case for increasing family income supplement so long as one could ensure that the take-up rate was increased. However, with reference to the figures provided by the CPAG, will only £17 million go to family income supplement and £12 million to housing benefit? What is the Government's reaction to that?
This move was not presaged in the newspapers. On the Sunday before the uprating some newspapers stated categorically that child benefit was safe. Something happened between Sunday and Tuesday, and I should very much like to know what that was. I agree with the hon. Member for Birkenhead that the significance of this debate is that it marks the divide in the House on the issue of child benefit, and I join him in deeply regretting that. The commitment that the Government are now giving is only to the universality of the benefit. Before this announcement everyone had assumed that the benefit


would be price protected. If the Government's commitment is only to universality, that is a new situation which we shall all have to face.
The decision taken in 1980 by the then Secretary of State to reduce the real value of child benefit, which was put right just before the 1983 general election, enabled the Government to say that they were in favour of price protection and were committed to protect child benefit. That has now changed. There are forces within the Conservative party—not just the Conservative women's national committee — which have expressed strong opinions in the House on this issue.
We have not changed our view about the argument of child benefit versus tax allowances. The hon. Member for Devizes mentioned the Policy Studies Institute opinion. We believe that child benefit, as opposed to tax allowances, is a more discriminating and cost-effective way of helping families and a more effective way of concentrating on low-paid families in need. I do not want to consider tax allowances as an alternative to child benefit. Tax allowances give money to the higher paid as well as to the low-paid. We must remember that half a million working families with children will gain nothing from any increase in tax allowance because their income is below the tax threshold. DHSS figures show that 82 per cent. of those living below supplementary benefit level where the family has a full-time worker are families with children. There is also the important fact that child benefit is paid to the mother.
In my arguments about child benefit versus means-tested benefit I must agree with the hon. Member for Oldham, West that the child benefit system is simple and relatively popular, which is in contrast to family income supplement. It is the budgeted take-up that is the problem. Some of the people who qualify for family income supplement qualify for levels of only 18p to 20p. That is also a real problem. Family income supplement has many problems which affect those earning just above supplementary benefit levels. Mothers are hardest hit because they do not get the money that they require to look after their children.
If family credit is paid through the pay packet, it will result in take-up problems and affect children. We need to be told whether the cut in the child benefit increase is to happen only once. The Secretary of State for Social Services said in answer to my intervention during his ststement on the uprating that judgments would have to be made in the light of circumstances. I understand that circumstances can change, but there is a world of difference between that and saying that child benefit will be the target of social security savings in future upratings.

Mr. John Butterfill: Like the hon. Member for Birkenhead (Mr. Field), I am concerned that many benefits are not well targeted. Although unprecedented levels of taxation are being levied, those who are poor and in need are not being reached. However, I am not convinced that child benefit is the best way to redress the balance. It is a universal benefit. We have a gigantic merry-go-round, with money being collected by the Inland Revenue and transferred via the Treasury to the Department of Health and Social Security. The Department forwards the money to the Post Office, which

distributes it, and about 70 per cent. of it goes back to the people from whom it was collected in the first place. The result is that insufficient money reaches those who are most in need. The administrative cost of this merry-go-round is £102 million a year. If one thinks of the total that is collected, that may not seem to be a large amount, but it is substantial. The blind would be glad to receive £102 million in the form of a blindness allowance.

Mr. Frank Field: Does the hon. Gentleman realise where this argument may lead him? Would he care to apply it to mortgage interest relief, where one finds the same recycling? Is there not a case for saying that that benefit ought to be phased out so that the rates of tax can be lowered and people may choose how to spend their money?

Mr. Butterfill: We cannot debate that subject tonight, but I take the hon. Gentleman's point. Those who are most in need, people on supplementary benefits, are unaffected by what is called a cut in child benefit, and those who qualify for family income supplement will do very well out of the new proposals.
If we strip away the rhetoric of the hon. Member for Oldham, West (Mr. Meacher) we find that he is concerned not about the poor but about the pin money of middle-class housewives. It would be better to abolish child benefit, except for those who qualify for supplementary benefit or family income supplement. There should be tapered, child tax allowances for those who do not receive supplementary benefit or family income supplement. The level of benefit paid to the poor would be improved and the administrative savings would be substantial. That money could be used to greater affect elswhere. I urge my right hon. Friend the Secretary of State for Social Services to consider that alternative.
No original ideas have been advanced from the Opposition Front Bench. I was disappointed that the hon. Member for Oldham, West did little more than quote verbatim from the compassionate but muddled brief that was circulated to hon. Members by the Child Poverty Action Group. His speech contrasted starkly with the thoughtful contribution of the hon. Member for Birkenhead and with the creative and compassionate approach of my right hon. Friend the Secretary of State, both in the Green Paper and in his speech.

Mrs. Virginia Bottomley: I wonder whether the arguments of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) also apply to the old age pension. Does he think that old age pensions should be provided only for those with below-average incomes? Individuals should be looked at in terms of their life cycle. Before reaching working age we are provided for and cared for, at least in part, by the State, whether through the taxation system or the welfare system. After retirement, once again we receive the benefit of State support and encouragement. I remind hon. Members that, under the child tax allowance system, the more children people had the better off they were. As a Conservative, I do not support a system of that kind; nor do I support the undermining of child benefit.

Mr. Butterfill: I would remind my hon. Friend that I said that child tax allowances ought to be tapered.

Mrs. Bottomley: I take my hon. Friend's point.

Mr. Field: But they are tapered the wrong way.

Mrs. Bottomley: The uprated allowance for an adult dependant is between £18 and £23 a week. The costs of a child, particularly a teenager, can be argued to be well above the costs of an adult dependant. Their nutritional needs, clothing needs and frequently their social needs are greater. Those needs must be fully recognised. I welcome the fact that family credit will take into account the age of children.
The key point about child benefit is its simplicity, reliability and regularity. When we look at the Green Paper and the uprating figures we see that endless categories of people are considered to be static groups: the disabled, the one-parent families, the unemployed. But the reality is that the lives of people are constantly changing. There are more one-parent families, but more people are getting remarried. Seven million people change their jobs every year, but 4 million people go from the unemployment register into work every year. The joy of child benefit is that a reliable, regular income is paid through thick and thin.
Hon. Members have no excuse for not appreciating the complexity of people's lives and the difficulties they get into over form filling, because our constituents attend our surgeries and ask us to try to make sense of the complexity of welfare benefits. As we have the greatest difficulty in understanding the benefits, it is hardly surprising that the most vulnerable members of our society do not understand what they are entitled to and how the system works. The joy of child benefit is that everybody, from the richest to the poorest in the land, knows that it is available and knows how to get it. Women frequently say that child benefit has helped them to keep going. It would be very sad if we ended the United Nations decade for women by undermining what has become their right and their expectation.
The debate on child benefit took place in International Women's Year. My right hon. Friend asked then whether the amount paid in child benefit could be entered on a man's pay slip. That does not happen, although my right hon. Friend is now the Secretary of State, so there may be greater difficulties about my suggestion than I appreciate. I recognise the difficulty created if a woman is obtaining a substantial amount of benefit but her husband feels that he is being heavily taxed — not realising where the money is going.
Another key advantage of child benefit is the maintenance of unit labour costs. We were reminded this week by the Chancellor of the Exchequer of the importance of maintaining competitive labour costs. The sting comes from the man with several children who is probably better off out of work. The maintenance of child benefit is one way in which to help those people.
I am pleased that so many references have been made to the longstanding work of the Conservative women's national committee. I wish to refer to a different part of its proposals:
We argue strongly that Child Benefit should have a high priority in our welfare system. Of all our social provisions it is remarkable, in that it has an almost universal take-up, is comparatively easy and cheap to administer and is paid directly in response to the need of children.
Like other hon. Members, I have received letters from constituents. One movingly states:
It has been believed in good faith that this benefit would keep pace with inflation, but sadly this does not seem to be so any

more. I realise that there are moves afoot to try to ease the plight of the low paid and unemployed, but there are those of us, who are just out of the supplementary benefit bracket, who find it very hard to make ends meet".
There are many other such women across the country.
I shall be supporting the Government tonight, but the child benefit lobby may have been lulled by the fact that child benefits were at record levels at the last general election. It may have been lulled in the short term, but when we look to the future I hope that the Government will realise that many of us are alive to and aware of child benefits and that we shall continue to fight for them.

Mr. Gordon Brown: Child benefit is a right. We were reminded today of when the Prime Minister said that it was evidence of the Government's commitment to the family. The Foreign Secretary has said that child benefit offers the greatest help to many of our poorest families. The Secretary of State for Social Services is on record as saying that child benefit was one of the most cost-effective ways of helping families with children and easing family poverty. Two years ago, just before the election, the Prime Minister said that there were no plans to change the basis on which child benefit is calculated. Indeed, before the 1979 election the then Conservative social services spokesman was prepared to say that he wanted child benefit to rise in line with tax allowances. That would have put child benefit up to £8 at this uprating. Before the last election, social services Ministers were prepared to say that they wanted to see child benefit consistently rise in line with inflation.
Given all that, it should be of serious concern to the House that the majority of Conservative Members—who have been prepared to lead a rebellion over student grants and to threaten a revolt over the situation affecting commercial ratepayers—are, with only a few notable exceptions, virtually silent over the Government's proposed cut in the value of child benefit, which comes on top of ending the automatic right to maternity benefit, a reduction in the value of widows' allowances and an end to the right to free school meals for a substantial section of the population.
What is worse, 500,000 children are living below the supplementary benefit payments level, and 3·75 million children are living on the fringes of poverty. Poverty among children, even on the Government's official figures, has doubled since 1979. Either one child in every four goes to school ill-clad and hungry, or parents must choose between heating and eating. It is therefore remarkable that the majority of Conservative Members have been silent as the Government have moved not from a period of consultation without information — the situation two weeks ago—but to implementation of the review proposals without consultation or information.
Conservative Members remain silent as 2 million people stand to lose housing benefit from November as a result of changes in the rates tapers. They are silent despite the fact that 500,000 people will lose housing benefit altogether, most of them pensioners. Although £29 million will go towards higher child additions for people on family income supplement and housing benefits, £175 million has been taken out of the child benefit budget without any assurance that child benefit will rise in line with inflation, or even at all, next year, the year after or in any year to come.
As a new Member of Parliament, I have come to suspect three things. The first is a debtor who tells me that a cheque is in the post. The second is a Conservative who invites me to a debate on philosophy. The third is a Conservative Back Bencher who tells me that he is about to lead a revolt or rebellion. Whether it be the Tory wets, those who support the concept of one nation, or the Centre Forward group, which seems to have disappeared as the football season ended, Conservative Members by their silence are saying that they are prepared to tolerate a divided nation in preference to living with a divided Conservative party over the social security review proposals.
They are prepared to support a reduction in taxation in preference to a reduction in deprivation. The Chancellor yesterday made a commitment that he would reduce taxes no matter what happens. A 1p in the pound reduction in taxation will cost around £1 billion. Before Conservative Members support that commitment, they should remember that it will mean that 7 million households, most of them pensioner households, will lose some housing benefit; 7 million mothers and 12 million children will lose the increase in child benefit that they should receive; and the 7 million people who depend on supplementary benefit will cumulatively get less money as a result of the social security changes.
To save £1 billion to secure a 1p in the pound reduction in income tax, the Secretary of State for Social Services has had to abandon any claim that this is a nil-cost review. It is a cost-cutting review in housing and child benefits, and it will be a cost-cutting review in terms of supplementary benefit.
We know that the cost of raising a child is far greater than the child benefit payment and the supplementary benefit addition for children. All the recent evidence in the paper produced by the Child Poverty Action Group—other organisations have drawn attention to it as well—shows that at present child benefit can cover barely one fifth of the cost of bringing up a teenage child.
On this and previous occasions Conservative Members have asked, "Why should rich mothers get child benefit?" They ignore the fact that child benefit was originally designed as a benefit to be paid to the mother rather than the husband. If we move from the universal concept of child benefit by reducing its value and introduce further means tests, the big money savings will come not from debarring the claims of the rich but from deterring the claims of the poor. Conservative Members are saying that they are prepared to allow child benefit to be frozen, as the Government probably intend to do from next year. They are really saying—

Mr. Douglas Hogg: rose—

Mr. Brown: I am not giving way.
Conservative Members are saying that it is too expensive to run a welfare state, particularly a family policy for children, without the stigma and shame attached to claiming means-tested benefits. They also tell us that family credit will do more for low-income families than child benefit. But how can we accept vague assurances about uncosted proposals for family credit, undisclosed benefit rates, an unknown number of beneficiaries and an unknowable impact on poverty when in their uprating statement last week the Government took away £175

million from child benefit and are to return only about £30 million to low-paid families? How can we accept any vague assurances from the Government about family credit when during the reviews they betrayed their promises on the state earnings-related pension scheme and widows' allowances? They have certainly betrayed the promise made by the Secretary of State at the outset, that these would be nil-cost reviews and that there would be no savings as a result.
Thirdly, Conservative Members tell us that they are prepared to support child benefit because it is simple, popular and easy to understand. They seem to forget that the main reason that we support rises in child benefit is that it is the most cost-effective, efficient and economical way of easing family poverty.
In addition to asking the Minister, as did the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), whether he can give an assurance that child benefit will not be frozen this year, may I ask him to confirm that, if one were to put the £1·5 billion which would ease the burden of family poverty into reducing taxation, that would help very few families substantially and none who are below the income tax level? It would help only those on one third average earnings by 60p a week, whereas child benefit could be doubled or at least raised by £6 which would help those on between half and one and a half times average earnings to the extent of £1·88 per week. An increase in child benefit of £6 per week would be a much more cost-effective way of expending the same amount of money to ease family poverty.
If the Government were serious about using the tax and benefits system to reduce family poverty and were not merely intending to cut taxes for the sake of it, without any consideration of the impact on poverty, they would propose to the House that, in preference to reducing the standard rate of income tax or raising tax thresholds the rate of child benefit should rise substantially.
I am not particularly concerned that the facts and figures which we have been expecting got lost on the way to the Cabinet or the printers. What worries me most is that the vision that inspired the Beveridge report and the commitment that has inspired previous Governments to act on family poverty is totally missing from any of the proposals and rhetoric contained in the reviews.
I urge Conservative Members to reconsider their decision on child benefit as well as on other benefits which have been attacked by the reviews. I urge the Government to use the period of consultation to listen not only to the Conservative women's national committee but to a whole series of non-political representative organisations. Not only are these organisations asking that child benefit be raised; they are pressing the Government with the claim that that is the most effective way of reducing family poverty.

Mrs. Edwina Currie: Like my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), I am one of the few Members who actually claim child benefit; I have my book in my handbag and am grateful for the £54·80 which we receive every month. It is a very valuable and useful addition to the Currie family budget. As in most of the other 7 million families in the country with their 12 million children, it is spent mostly on the children.
All the advantages of the child benefit system have been rehearsed tonight. It is payable to everyone, it is cheap to administer, and it costs 25p per payment, which is one tenth what a supplementary benefit payment costs to administer. There is a feeling of equity, that we are all the same and that we are all in the same boat.
But I think that those of us in the position of my hon. Friend and myself should have an uneasy feeling about it. If we are to criticise, as Opposition Members have, tax cuts to families which do not need them, we ought equally to criticise benefit payments to families which do not need them. I do not need the money. Seventy-five per cent. of all families are over the supplementary benefit line before they receive child benefit. Those families which are in need and in receipt of family income supplement and supplementary benefit do not get any benefit from the child benefit payment; it is simply taken into account when their needs are calculated, so they do not see it.
We should also be aware of how much money we are talking about. If we were to abolish child benefit—we are talking about £4·4 billion this year—we would need about £800 million to make up to the families receiving family income supplement and supplementary benefit the element accounted for by child benefit. That would leave about £3,500 million to play with for all the other families of the nation. What we could do with that is raise all tax thresholds by 18 per cent. or reduce the standard rate of income tax to 27 per cent., and that would benefit all those families as well.

Mr. Frank Field: It would do the exact opposite. What the hon. Lady proposes is to take money away from families and spread it throughout the nation, including that half of the nation which do not have children.

Mrs. Currie: There are all sorts of ways of doing this. I merely quote the figures to show hon. Members exactly how much money we are talking about, and what a big dent in the tax system child benefit makes.
The Government have decided to raise child benefit for lone parents by the rate of inflation, child benefit for family income supplement receivers by more than inflation and my child benefit by less. I happen to think that that is right. Seven pounds per week per child will still be very nice. I do not feel the agony of the Labour motion at not getting an additional 33p per week on top of my £7.
Quite honestly, I would rather see inflation fall, because a drop in inflation would be of more value not only to the receivers of child benefit but to everyone else in the nation; more than almost anything else that we could propose.
The Labour motion talks about breach of promise. I always thought that breach of promise was one of those very difficult things to prove in court and that the evidence that would be produced by the defendant would often point to the rather sleazy background of the plaintiff. If I may have the permission of the House, that is exactly what I propose to do.
I asked the Library to produce for us the figures on the real value of the combined child benefit and child tax relief that we used to have before 1978, and it produced figures that go back to 1946. The support for a one-child family in August 1946 amounted, in November 1984 prices, to £5·28. In April 1951, the figure, as the hon. Member for Oldham, West (Mr. Meacher) quoted it, was £6·56. In 1956, it was £6·46, and so on. Then we get to the last

Labour Government. In 1976, it was £4·72, quite a drop. Now we come to our Government. Last year, it was £6·82 and this year it is £6·85. The only years—and I am quoting—in which the child support in real terms was higher than November 1984 were in April 1952 under a Tory Government and in April 1955 under a Tory Government.
If it comes to having a go at a particular Government's policy on child benefit, the Labour party does not have a leg to stand on. If it comes to breach of promise, the Labour party bride is rolling up to the altar in the emperor's clothes, and it is a rather embarrassing sight.
As for Labour's own policy, that has already been dealt with to some extent very ably by my right hon. and hon. Friends. I think that it is worth pointing out two small points in the time available to me. The hon. Member for Oldham, West for about three days in April, managed to propose, before his other right hon. and hon. Friends got to him, that Labour should double the child benefit for most of us and treble the child benefit to children of single-parent families. To pay for all this, the married man's tax allowance would be abolished and the additional single person's tax allowance would disappear. On top of that, fewer people would be eligible for family income supplement, fewer people would be eligible for free prescriptions and fewer children would get free school meals. That was in all those proposals. That is quite an exciting suggestion—it is a good job that it was thrown out.
On top of that, the hon. Gentleman clearly said—I quote from his document on page 17—that he would have
an amalgamated National Insurance and Incomes Acts levied on a progressive basis on all personal income at rates of 15 per cent., 30 per cent., 45 per cent. and 60 per cent.
As I understand it, that would be a tax on child benefit, and it also means that he would tax the lower income groups at 15 per cent. In the Standing Committee on the Social Security Bill, on which I served, we cut the rate of national insurance contribution for the lowest-paid workers to 5 per cent., so the Labour party proposals would tax the lowest paid workers three times as much as we would in order to do that.
The hon. Member for Oldham, West is quoted in The Guardian of 16 April this year as saying that
his main aim was to abolish the degrading supplementary benefit system which he described as 'a fraud'.
Up in Derbyshire, we say that it takes one to know one, but it would be both unparliamentary and very unkind of me to direct a remark of that nature to the hon. Gentleman, who is not even listening.
My other main criticism of the motion refers to the question of mothers being the recipients. I have no desire to change the system, because I think that changing at would simply be change for change's sake, but I should like to challenge some of the underlying attitudes and at the same time to say that I find these attitudes on both sides of the House.
Sixty per cent. of all women of working age work. We make up to 41 per cent. of the workforce, and the percentage is growing. The household with the man as the sole earner and the woman at home with two children is very rare. Such households make up only 5 per cent. of all households. Most mothers now work. Many mothers are now taxpayers. It is patronising, wrong and out of date to suggest that we are not interested in tax cuts. Of course


we are interested in them. Many working mothers will benefit more than their husbands from raising tax thresholds, because it is a common practice for many mothers to work up to the rate at which they start paying tax, and no further. If we raise that rate, they will be able to earn more money. That point should be put across firmly.
As to the notion that the cash handout should go to the mother because she looks after the children, I have to say that I think that parents look after the children. We should not perpetuate the idea that children need only their mother and that only the mother is capable of taking that responsibility. That is nonsense. That sort of philosophy, borne of feminism, has created far too many single-parent families and deprived far too many men of their children.
The child benefit system has none of the special qualities attributed to it by hon. Members. It is merely the redistribution of £4·4 billion a year. It comes from taxpaying pensioners. It comes from my constituents who pay VAT on their fish and chips or on the porch to go on their houses. The child benefit system competes with the other services that we would like—for example, the National Health Service, pensions, good roads and education. Child benefit goes to the mother of every child—not where there is a need but where there is a child, whether living in a castle or a hovel. We keep it because the British people want it. The Government's sensitive and generous approach deserves our support.

Mr. Timothy Wood: In this debate we must first re-emphasise that child benefit must be considered not in isolation but in conjunction with family income supplement and benefits paid to the poorer families in general. It is appropriate and sensible that we are going forward in the proposed upratings with a system that substantially increases family income supplement and thus directs more money to those in need.
I accept the worries that have been expressed about the poor take-up of family income supplement. Because of this poor take-up, I supported the changes in the Green Paper with respect to family credit. This is a much better approach towards providing special assistance for the poor and general support for children.
I very much respect the remarks made on many occasions in debates such as this by the hon. Member for Birkenhead (Mr. Field), but I was slightly surprised today by some of his comments. If I understood him correctly, he said that it would be possible to tax child benefit and that this would have a significant impact on families with a number of children which were caught in the poverty trap. I do not believe that that is true. Having looked at the figures in detail, I believe that the introduction of a tax on child benefit would effectively reduce the level of pay at which low-wage families would be subjected to tax. That would have an adverse effect.
The only way to cope satisfactorily with the problem would be to introduce a child allowance system or low tax threshold system for families with children. If that were done, one might be able to pursue the type of idea that is put forward by the hon. Member for Birkenhead and a number of my colleagues. If that were not done, the measure would have a damaging effect on low-income

families with several children in terms of the poverty trap and the level of their take-home pay after wage increases. I have great reservations about that change.
It is important that we do not consider any one benefit in isolation and that we welcome the substantial increase in family income supplement and the help that it will give to those most in need.

The Minister for Social Security (Mr. Tony Newton): The debate has revealed a wide range of views, but it has singularly failed to throw the slightest additional light of any kind on the policies that the Labour party is urging on the House. One aspect about the Labour party that has become clearer during the debate is—

Mr. Roland Boyes: The Minister is already accepting that we will form the next Government. He has put up the white flag.

Mr. Newton: I should like to say to the hon. Gentleman—[Interruption.]

Mr. Speaker: Order. Give the Minister a chance; he has only been up one minute.

Mr. Boyes: That is too long.

Mr. Newton: It is all right. The hon. Member for Houghton and Washington (Mr. Boyes) is not a bad bloke. I do not mind dealing with him. I am treating the Labour party with at least the respect that one would give those who presumably wish to become the Government. The only way in which the Labour party will have the slightest chance of becoming the Government—it is a very slight chance—is for it to have some type of policy. I want to know when we will be given the slightest sign of that policy. We learnt just one thing during the past two and a half hours about the Labour party—the Labour party's interest in child benefit is three deep. That is the number of Labour Members who were here to hear the hon. Member for Oldham, West (Mr. Meacher) when he started his speech. Three Labour party Members were here to hear this great assault on the Government's social security policy, and one them left during the first paragraph! Frankly, he did not miss a thing.
I shall deal with some of the criticisms of the proposals in last week's uprating statement by my right hon. Friend the Secretary of State. It is right that I should repeat what he said. These proposals are in the context of an uprating which spent an additional £2 billion on social security benefits, taking it to a total of £42 billion, which represents one pound in every three of the money that is raised from taxpayers and contributors in taxation and contributions. It is worth my saying again that the uprating included an increase of £4 a week for married pensioner couples. This means that the pension of a married couple and, indeed, of all retirement pensioners will have risen by 96 per cent. between the time when the Conservative party took office and November 1985, compared with a rise of 86 per cent — 10 per cent. more than the expected increase — in prices during the same period. Last week's uprating statement included a range of measures to help less well-off families, especially those with children in work.
The hon. Member for Oldham, West make some play of the figures relating to the complicated inter-relationship between family income supplement, supplementary benefit and child's needs allowances in housing benefit. I have no hesitation in accepting, first, that that


relationship is complicated and, secondly, that it makes it difficult for Governments—whatever their colour—to achieve rational results with their policies. In the social security review we have put forward the first coherent structure in 50 years for income-related benefits to enable us to target resources more effectively.
Even with those problems and the kinks that inevitably occur within the present complicated and incoherent system, a married couple with two children aged 4 and 6, and whose gross earnings are £60 will get an increase in the family income supplement of £1, an increase in housing benefit of 53p and, even allowing for the fact that they will not be receiving the 70p of child benefit represented by the 35p — the difference between its uprating and the full prices figure—they will be better off by 83p net a week. The same would be true for the same family on £80 a week, and it would be 1p less for that family on £100 a week. For a married couple, with two children aged 12 and 14, on exactly the same basis, allowing for the fact that child benefit has gone up by 15p, and not 50p, there will still be, for the £60 a week couple, a net increase of £1·50 over and above what they would otherwise have received; for those on £80 a week an increase of £1·50; and for those on £100 a week an increase of £1·40.
Of course I accept that this is subject to problems of take-up, just as it is subject to problems of complication, but that is why the Government are seeking in the social security review to achieve a simpler, fairer, more understandable and more readily receivable social security system. The fact that we have problems at the moment which the Government are trying to tackle strategically does not give cause for accusation, because we are trying at least to do what we can to help less well-off families within the existing benefits structure.
I make no apologies whatever for that or for the fact that only a few months ago, in my right hon. and learned Friend's Budget, changes in national insurance contributions were announced which will benefit most of those self-same families by a significant additional £1 or £2 a week. In the last three months we have probably seen the announcement of the most significant extra package of help to low-paid families with children that any Government have introduced for several years.

Mr. Frank Field: The Minister has talked about the Government making strategic decisions. Until the announcement last week, the Government had increased child benefit in line with rising prices. They did not do so this year. Is that the policy from now on, or was this a one-off decision just for this year?

Mr. Newton: The hon. Gentleman asked that question in the course of his speech, and I would have answered it later. The Government's position on the uprating of child benefit is, as it has always been, and as it was stated by my right hon. Friend some time ago, that inescapably this is a matter, like many others in social security, on which we have to make judgments when the decisions are taken in the light of all the circumstances prevailing and of particular social priorities—in this case our desire to steer additional help to less well-off families with children.

Mr. Kirkwood: Will the Minister give the Government's strategic response to the universality of child benefit? Can he go as far as to say that he would

interfere with that, if he cannot give the assurance for which the hon. Member for Birkenhead (Mr. Field) is asking?

Mr. Newton: The Green Paper makes it clear, as we have made it clear on a number of occasions, that the Government adhere to the concept of a universal child benefit payable through the mother. I hope that that will be some reassurance to my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) as well. There is no question of departing from that principle, and that is made very clear in the Green Paper.

Mr. Gordon Brown: Will the Minister confirm that the Government have now abandoned any pretence that child benefit will continue to rise in line with inflation in future years? Secondly, will he tell us whether, if that decision is made, the £175 million saved this year and the perhaps £500 million saved by the time of the next general election will go to the family credit scheme, or will only a small fraction of it go, as happened last week, to improving family income supplement?

Mr. Newton: I do not know what the hon. Gentleman means by using the word "pretence" in this context. I have made the position absolutely clear — that the Government will make judgments about the proper level of child benefit in the light of the circumstances prevailing at the time when those decisions have to be made, taking account of other social priorities, including our particular wish to direct more help more effectively to families with children.

Mr. Frank Field: Will the Minister accept that the answer that he has given is clear and that it is a major change in the stance that every other Conservative spokesman has taken on this issue?

Mr. Newton: I do not think that it is a major change, with the significance with which the hon. Gentleman has sought to invest it. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), my right hon. Friend's predecessor, made it clear in the statement that has been quoted several times today that the Government's decision in this matter would necessarily be related to economic and other circumstances. Those other circumstances necessarily include judgments about the overall priorities of the social security budget and are particularly concerned with low-paid families in work, on which I placed a good deal of emphasis.
I have said that I think that the hon. Member for Oldham, West did rather less than justice to the Government's proposals represented in the uprating statement. Perhaps that was understandable, since he did even less justice to his own proposals and to the thoughts that he has put, not just before the House, but before the country as a whole.
Perhaps I might have the attention of the hon. Member for Oldham, West for a moment or two, because I am anxious to regale the House with his words on "Newsnight" on 18 June. Indeed, as he said earlier in the debate, I was taking part in the programme with him. He said:
We do need a better integration between income tax and the social security system, but based on an income tax system which is graded in its structure so that the lowest paid are either out of tax altogether or they pay a low rate of 15 per cent. and above that 30, 45 or 60 per cent.
If you had that you could pay universal benefit like child benefit to everyone but then concentrate it on those in greatest


need without a means test by taxing it, and that would be a far better way of ensuring that we retain universality but at the same time concentrate it on those who really need it.
When he was challenged by my right hon. Friend about this notion of taxing child benefit—which I must say the Child Poverty Action Group considers to be just as much an attack on child benefit as anything that the present Government have done—the hon. Gentleman said that what he had in mind was a different structure of taxation. Now, however, as we have learnt from his green—or whatever colour it was—paper, which has disappeared into some pigeon-hole somewhere, the hon. Gentleman's idea of a new structure of taxation appears to be one in which everybody right down to the bottom of the income range pays at least 15 per cent. income tax—[HON. MEMBERS: "No."] Well, what else does it mean? It says that the lowest payers are either out of tax altogether or pay a low rate of 15 per cent. Let the hon. Gentleman tell me what he means.

Mr. Meacher: It is obvious.

Mr. Newton: The hon. Gentleman does not know what it means. The one thing that has encouraged me in the debates on this issue over the past few weeks is that there is at least one thing in common between the Opposition Front Bench spokesman on social security and the Leader of the Opposition, who is unhappily absent, and that is that neither of them understands half the things that he says in the House. The hon. Gentleman has clearly signalled that it is his intention, in some way or another, to tax child benefit, whether at 15 per cent. or 30 per cent., in the hands of very large numbers of people. There is no way that that structure will work without substantial numbers of the families whom the hon. Gentleman is claiming to protect having effectively a 30 per cent. or 15 per cent. cut in their child benefit in the form of a major raising of the tax threshold for the person earning the salary.
I hope that the hon. Member for Birkenhead (Mr. Field) will reflect that any such variants of taxing child benefit lead instantly and automatically to a substantial reduction in take-home pay for every family man who is a wage or salary earner. It is not, therefore, a sensible proposal.
Whether that is recognised through the tax or benefits system, or in what combination and at what level, are matters for debate about child benefit. In our system, it is recognised by universal child benefit paid to the mother, and we believe that that should continue, although it does not follow that its relationship with other benefits is immutable or that the Government can escape the need to make judgments from time to time.
Our judgment this year is that it is reasonable to make an increase of 15p for everyone and to give extra help to less well-off families through FIS and housing benefit. That is a judgment for which we do not apologise and which, I believe, the House as a whole will back.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 144, Noes 241.

Division No. 251]
[7 pm


AYES


Archer, Rt Hon Peter
Banks, Tony (Newham NW)


Ashley, Rt Hon Jack
Barnett, Guy


Ashton, Joe
Beckett, Mrs Margaret


Atkinson, N. (Tottenham)
Beggs, Roy





Beith, A. J.
Janner, Hon Greville


Bell, Stuart
Kilfedder, James A.


Benn, Tony
Kilroy-Silk, Robert


Bennett, A. (Dent'n &amp; Red'sh)
Kirkwood, Archy


Bermingham, Gerald
Lamond, James


Blair, Anthony
Leadbitter, Ted


Boothroyd, Miss Betty
Leighton, Ronald


Boyes, Roland
Lewis, Ron (Carlisle)


Bray, Dr Jeremy
Lewis, Terence (Worsley)


Brown, Gordon (D'f'mline E)
Litherland, Robert


Brown, Ron (E'burgh, Leith)
Lofthouse, Geoffrey


Buchan, Norman
McCartney, Hugh


Caborn, Richard
McCrea, Rev William


Callaghan, Jim (Heyw'd &amp; M)
McDonald, Dr Oonagh


Campbell-Savours, Dale
McKay, Allen (Penistone)


Carlile, Alexander (Montg'y)
MacKenzie, Rt Hon Gregor


Carter-Jones, Lewis
McNamara, Kevin


Cartwright, John
Madden, Max


Clark, Dr David (S Shields)
Maginnis, Ken


Clay, Robert
Martin, Michael


Cocks, Rt Hon M. (Bristol S.)
Mason, Rt Hon Roy


Cohen, Harry
Maxton, John


Concannon, Rt Hon J. D.
Meacher, Michael


Conlan, Bernard
Mikardo, Ian


Cook, Frank (Stockton North)
Millan, Rt Hon Bruce


Corbyn, Jeremy
Miller, Dr M. S. (E Kilbride)


Cowans, Harry
Mitchell, Austin (G't Grimsby)


Cox, Thomas (Tooting)
Molyneaux, Rt Hon James


Craigen, J. M.
Oakes, Rt Hon Gordon


Crowther, Stan
O'Brien, William


Cunningham, Dr John
Park, George


Davis, Terry (B'ham, H'ge H'l)
Parry, Robert


Deakins, Eric
Patchett, Terry


Dewar, Donald
Pavitt, Laurie


Dixon, Donald
Pendry, Tom


Dobson, Frank
Pike, Peter


Dormand, Jack
Powell, Rt Hon J. E. (S Down)


Dubs, Alfred
Powell, Raymond (Ogmore)


Eastham, Ken
Prescott, John


Edwards, Bob (W'h'mpt'n SE)
Redmond, M.


Ellis, Raymond
Richardson, Ms Jo


Evans, John (St. Helens N)
Roberts, Ernest (Hackney N)


Faulds, Andrew
Rowlands, Ted


Field, Frank (Birkenhead)
Ryman, John


Fisher, Mark
Sedgemore, Brian


Flannery, Martin
Sheldon, Rt Hon R.


Foot, Rt Hon Michael
Shore, Rt Hon Peter


Forrester, John
Short, Mrs R.(W'hampt'n NE)


Foster, Derek
Silkin, Rt Hon J.


Fraser, J. (Norwood)
Skinner, Dennis


Freeson, Rt Hon Reginald
Smith, Rt Hon J. (M'kl'ds E)


Freud, Clement
Smyth, Rev W. M. (Belfast S)


George, Bruce
Snape, Peter


Godman, Dr Norman
Soley, Clive


Gould, Bryan
Stewart, Rt Hon D. (W Isles)


Hamilton, James (M'well N)
Stott, Roger


Hamilton, W. W. (Central Fife)
Strang, Gavin


Harman, Ms Harriet
Torney, Tom


Harrison, Rt Hon Walter
Wainwright, R.


Hart, Rt Hon Dame Judith
Walker, Cecil (Belfast N)


Hattersley, Rt Hon Roy
Wareing, Robert


Haynes, Frank
Weetch, Ken


Healey, Rt Hon Denis
Welsh, Michael


Heffer, Eric S.
Winnick, David


Hogg, N. (C'nauld &amp; Kilsyth)
Woodall, Alec


Holland, Stuart (Vauxhall)
Young, David (Bolton SE)


Howell, Rt Hon D. (S'heath)



Hoyle, Douglas
Tellers for the Ayes:


Hughes, Robert (Aberdeen N)
Mr. John McWilliam and


Hume, John
Mr. Lawrence Cunliffe.


NOES


Adley, Robert
Aspinwall, Jack


Aitken, Jonathan
Atkinson, David (B'm'th E)


Alexander, Richard
Baker, Nicholas (N Dorset)


Alison, Rt Hon Michael
Baldry, Tony


Amess, David
Banks, Robert (Harrogate)


Ancram, Michael
Batiste, Spencer


Arnold, Tom
Bellingham, Henry


Ashby, David
Bendall, Vivian






Bennett, Rt Hon Sir Frederic
Grant, Sir Anthony


Benyon, William
Greenway, Harry


Best, Keith
Griffiths, Sir Eldon


Biffen, Rt Hon John
Gummer, John Selwyn


Biggs-Davison, Sir John
Hamilton, Neil (Tatton)


Blackburn, John
Hargreaves, Kenneth


Blaker, Rt Hon Sir Peter
Haselhurst, Alan


Bonsor, Sir Nicholas
Hayes, J.


Boscawen, Hon Robert
Hayward, Robert


Bottomley, Peter
Heddle, John


Bottomley, Mrs Virginia
Hickmet, Richard


Bowden, A. (Brighton K'to'n)
Higgins, Rt Hon Terence L.


Bowden, Gerald (Dulwich)
Holland, Sir Philip (Gedling)


Brandon-Bravo, Martin
Holt, Richard


Bright, Graham
Jenkin, Rt Hon Patrick


Brinton, Tim
Johnson Smith, Sir Geoffrey


Brooke, Hon Peter
Knight, Greg (Derby N)


Brown, M. (Brigg &amp; Cl'thpes)
Knight, Dame Jill (Edgbaston)


Bruinvels, Peter
Knox, David


Bryan, Sir Paul
Lang, Ian


Burt, Alistair
Latham, Michael


Butler, Hon Adam
Lawrence, Ivan


Butterfill, John
Lawson, Rt Hon Nigel


Carlisle, John (N Luton)
Leigh, Edward (Gainsbor'gh)


Carlisle, Kenneth (Lincoln)
Lennox-Boyd, Hon Mark


Carlisle, Rt Hon M. (W'ton S)
Lewis, Sir Kenneth (Stamf'd)


Carttiss, Michael
Lightbown, David


Cash, William
Lilley, Peter


Chalker, Mrs Lynda
Lloyd, Peter, (Fareham)


Chapman, Sydney
Lord, Michael


Chope, Christopher
Luce, Richard


Clark, Hon A. (Plym'th S'n)
Lyell, Nicholas


Clark, Sir W. (Croydon S)
McCrindle, Robert


Clarke, Rt Hon K. (Rushcliffe)
McCurley, Mrs Anna


Clegg, Sir Walter
MacGregor, John


Colvin, Michael
MacKay, Andrew (Berkshire)


Conway, Derek
MacKay, John (Argyll &amp; Bute)


Coombs, Simon
Maclean, David John


Cope, John
McNair-Wilson, P. (New F'st)


Couchman, James
McQuarrie, Albert


Cranborne, Viscount
Major, John


Critchley, Julian
Malins, Humfrey


Crouch, David
Malone, Gerald


Currie, Mrs Edwina
Maples, John


Dickens, Geoffrey
Marland, Paul


Dicks, Terry
Marlow, Antony


Dorrell, Stephen
Marshall, Michael (Arundel)


Dunn, Robert
Mates, Michael


Durant, Tony
Mather, Carol


Eggar, Tim
Mawhinney, Dr Brian


Emery, Sir Peter
Maxwell-Hyslop, Robin


Evennett, David
Mayhew, Sir Patrick


Eyre, Sir Reginald
Mellor, David


Fairbairn, Nicholas
Merchant, Piers


Fallon, Michael
Meyer, Sir Anthony


Farr, Sir John
Mills, Iain (Meriden)


Favell, Anthony
Miscampbell, Norman


Finsberg, Sir Geoffrey
Mitchell, David (NW Hants)


Fletcher, Alexander
Moate, Roger


Fookes, Miss Janet
Montgomery, Sir Fergus


Fowler, Rt Hon Norman
Morris, M. (N'hampton, S)


Fox, Marcus
Morrison, Hon C. (Devizes)


Gale, Roger
Moynihan, Hon C.


Gardner, Sir Edward (Fylde)
Murphy, Christopher


Garel-Jones, Tristan
Needham, Richard


Glyn, Dr Alan
Nelson, Anthony


Gorst, John
Newton, Tony





Nicholls, Patrick
Squire, Robin


Normanton, Tom
Stanbrook, Ivor


Norris, Steven
Stanley, John


Onslow, Cranley
Steen, Anthony


Oppenheim, Phillip
Stern, Michael


Oppenheim, Rt Hon Mrs S.
Stevens, Lewis (Nuneaton)


Osborn, Sir John
Stewart, Allan (Eastwood)


Ottaway, Richard
Stewart, Andrew (Sherwood)


Page, Sir John (Harrow W)
Stewart, Ian (N Hertf'dshire)


Page, Richard (Herts SW)
Stokes, John


Parkinson, Rt Hon Cecil
Stradling Thomas, J.


Patten, J. (Oxf W &amp; Abdgn)
Sumberg, David


Pawsey, James
Taylor, Teddy (S'end E)


Peacock, Mrs Elizabeth
Temple-Morris, Peter


Porter, Barry
Thomas, Rt Hon Peter


Portillo, Michael
Thompson, Donald (Calder V)


Powell, William (Corby)
Thompson, Patrick (N'ich N)


Powley, John
Thorne, Neil (Ilford S)


Prentice, Rt Hon Reg
Thurnham, Peter


Price, Sir David
Townsend, Cyril D. (B'heath)


Proctor, K. Harvey
Tracey, Richard


Raison, Rt Hon Timothy
Twinn, Dr Ian


Rees, Rt Hon Peter (Dover)
van Straubenzee, Sir W.


Rhodes James, Robert
Vaughan, Sir Gerard


Ridsdale, Sir Julian
Waddington, David


Roberts, Wyn (Conwy)
Wakeham, Rt Hon John


Robinson, Mark (N'port W)
Walden, George


Roe, Mrs Marion
Walker, Bill (T'side N)


Rossi, Sir Hugh
Walker, Rt Hon P.(W'cester)


Rost, Peter
Wall, Sir Patrick


Rowe, Andrew
Waller, Gary


Sackville, Hon Thomas
Ward, John


Sainsbury, Hon Timothy
Wardle, C. (Bexhill)


Sayeed, Jonathan
Warren, Kenneth


Shaw, Sir Michael (Scarb')
Watts, John


Shelton, William (Streatham)
Wells, Sir John (Maidstone)


Shepherd, Richard (Aldridge)
Wheeler, John


Shersby, Michael
Whitney, Raymond


Sims, Roger
Wiggin, Jerry


Skeet, T. H. H.
Wolfson, Mark


Smith, Sir Dudley (Warwick)
Wood, Timothy


Smith, Tim (Beaconsfield)
Yeo, Tim


Soames, Hon Nicholas
Young, Sir George (Acton)


Speed, Keith



Speller, Tony
Tellers for the Noes:


Spence, John
Mr. Archie Hamilton and


Spencer, Derek
Mr. MIchael Neubert.


Spicer, Jim (W Dorset)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House endorses the Government's commitment to maintain Child Benefit as a universal benefit paid to all mothers as a contribution to the cost of bringing up children; notes that an additional £2 billion will be spent on benefits as a result of the uprating in November; welcomes the additional help that will be provided for low income families with children and welcomes the proposals for a simpler and more effective benefit structure which will result from the Government's recent review.

Child Benefit

Mr. Speaker: We now move to the important Opposition debate on child benefit. I must tell the House that I have selected the amendment in the name of the Prime Minister.

Mr. Michael Meacher: I beg to move,
That this House strongly condemns the Government's breach of their own repeated promises to increase Child Benefit in line with inflation which will result in mothers and children being deprived of £175 million in the current year as the first of the Green Paper cuts; notes that Child Benefit is uniquely effective in countering family poverty, reducing the poverty trap and ensuring that mothers are the recipients of monies needed for child care; and therefore calls upon the Government to restore the real value of Child Benefit both now and for the future.
Our case in this debate is very simple and very clear. It is that child benefit is uniquely effective in countering family poverty, in reducing the poverty trap and in ensuring that the person who receives the money necessary for caring for the children is the mother. It was a Labour Government who brought in child benefit and, for the reasons that I have just given, we believe strongly that it is a key benefit, central to our social security system, which should be built up and not cut back. It is a benefit which has attracted widespread endorsement.
I offer at the outset one or two quotations. My first is this:
We would all, I suspect, like to see an increase in child benefit; I think that it is one of the most effective ways in which you can deal with the problem of poverty and the problem of bringing help to children.
I am sure that we would all say "Heat, hear" to that. Those were the words not of a Labour Minister, but of the present Secretary of State for Social Services when speaking to the Treasury and Civil Service Sub-Committee on 28 July 1982. That was when he still believed in child benefit, just as, when he set up the pensions inquiry, he.still believed in the state earnings-related pension scheme.
If child benefit was, in the Secretary of State's own words,
one of the most effective ways
of dealing with the problem of poverty, does the downgrading now of child benefit mean that the Government are repudiating that objective? The Secretary of State does not appear to want to reply now. No doubt he will do so later.
On 28 June 1983 the Prime Minister said that the Government's real increase in child benefit then was
evidence of our commitment to the family."—[Official Report, 28 June 1983; Vol. 44, c. 49.]
Quite so, but does this latest princely increase of 15p—which is less than one third of the rate of inflation—now indicate that the Government's commitment to the family is somewhat wilting? That is another question to which we would like an answer today.
I offer a third quotation:
It plays a major part in easing the unemployment trap, and so in our strategy of improving incentives for everyone. It is important for families, and particularly for the low paid. Indeed,


it is the benefit which provides the greatest help to many of the poorest families in the country. I refer, of course, to child benefit."—[Official Report, 15 March 1983; Vol. 39, c. 143.]
Again that is not some Child Poverty Action Group enthusiast, as one might think, but the right hon. and learned Member for Surrey, East (Sir G. Howe), the then Chancellor of the Exchequer, in 1983.
If child benefit is so effective in all these roles, according to Ministers, why is it being sidelined now? If all those unsolicited panegyrics applied in 1982 and 1983, why do they not apply now?
The Secretary of State's justification for his backtracking on child benefit was stated by him in his answer to me a week ago, when he said:
The first priority must be to give help to families in greatest need."—[Official Report, 18 June 1985; Vol. 81, c. 177.]
It would indeed be a seductive argument if it were true, but it is not. It simply does not reflect what the Secretary of State has done, for three good reasons.
First, only a fraction—about 16 per cent.—of the £175 million saved from the child benefit cut is being used to improve benefits for low-income families. The improvement in family income supplement will cost just £17 million, and the housing benefit child's needs allowance £12 million — which had in any case originally been promised for April this year. So the Government are not transferring resources at all; they are cutting benefit to mothers by £150 million.
Secondly, cutting child benefit and spending more on FIS, which is the Government's strategy, does not concentrate resources on the poorest families. It has the opposite effect. It cannot be stated too often that take-up of child benefit is virtually 100 per cent., while FIS, because it is means-tested, reaches only about half of all the low-paid families which are eligible. Housing benefit is little better—the take-up there is about two thirds. So the losers from the right hon. Gentleman's package are clear. They are those entitled to FIS but not claiming it, and that is about 200,000 of the poorest families, those with incomes just above the FIS eligibility levels, and mothers and children in families with reasonable incomes, but where the income is not shared fairly. Far from being helped by what the Government have done, those families will be the hardest hit.
There is a third important reason, if one follows through the logic of the right hon. Gentleman's package, why the outcome contradicts his own claims. It is that even those families which get the family income supplement will find that the so-called extra help that the Government are providing by increasing the FIS prescribed amount by more than 7 per cent. will be swallowed up by the loss of child benefit and the consequential changes in housing benefit.
I shall give an example which effectively demolishes the Government's case. In March of this year the average FIS payment for a two-child family was £12, which implied an average wage of around £76 a week. Assuming that their earnings increase in line with inflation, this family's FIS award will increase by £1 in real terms as a result of the higher FIS levels announced by the Government a week ago. However, at the same time, no less than 70p of this £1 increase will be snatched back by the cut in child benefit.
Indeed, the result will be even worse because of the infernal logic of the interconnection between means tested benefits. Because increases in FIS are taken into account

for calculating housing benefit, many parents will find that the gain in housing benefit due to the increased child's needs allowance will be outweighed by the downward adjustment to housing benefit resulting from the higher FIS levels. The Secretary of State looks puzzled, but I hope he realises the logic of his own proposals. That is exactly what will happen even to those who get the fullest benefit of his increases.
The result of all that was the boast by the Secretary of State a week ago:
The first aim is to direct help to the poorest … That is precisely what we are doing".—[Official Report, 18 June 1985; Vol. 81, c. 177.]
That is not borne out by the facts. Indeed, the truth is the reverse. Downgrading child benefit and upgrading the odds and ends of means tested benefits at the margin does not bring the greatest help to the poorest families, but traps them even more deeply in their own poverty.
We know the Government's real motive behind this child benefit cut. It has next to nothing to do with targeting the needy, which is Fowlerspeak for more meanstesting. It has everything to do with cutting expenditure on benefits to safeguard future tax cuts, which, as usual, will go mainly to the better off and the rich.

Mr. Jerry Hayes: rose—

Mr. Meacher: If the hon. Gentleman was in his place at the start and heard my argument, he knows how compelling it is. If it has a fault, I should like to know what it is. It contains the compelling fact that even those who will benefit most by the increase in FIS levels will probably lose in net terms, leaving aside those who, because they do not claim FIS, do not get the benefit.
Far from concentrating resources on poorer families, which will not happen as a result of this package the proposal paves the way for concentrating resources on the richer sections of society — a redistribution which has become the characteristic hallmark of Thatcherite Toryism. That connection was made absolutely explicit yesterday by the Chancellor of the Exchequer when he made a ringing call to bankers and business men at the Carlton Club in favour of further tax cuts at the expense of further public expenditure cuts, and child benefit is the first victim of that renewed Treasury drive.

Mr. Hayes: How can the hon. Gentleman say, hand on heart, looking at the figures, that the Government's proposals are not designed to help families most in need, when he has not mentioned that one-parent benefit has increased by 7 per cent., that the child's needs allowance has gone up to £15.40 a week, and that there is a new higher prescribed amount for families with older children?

Mr. Meacher: I am not surprised that the hon. Gentleman ran away after a single day when he was setting up a new organisation in the Tory party, if those were the sorts of arguments that he had in mind. He obviously has not listened to my remarks. I mentioned the increases in housing benefit, in the child's needs allowance and in the FIS prescribed amounts. I agree that for one-parent families the FIS increase is an improvement, but would the hon. Gentleman care to give the details of the increases and the number of families who will receive them? They are minuscule compared with the 12 million children who are losing 35p every week this year as a result of the cut in child benefit.
This switch from public expenditure to taxation cuts has precious little justification. The Financial Times—scarcely a Left-wing publication—commented on 20 June, just after the Secretary of State announced his package:
By looking for economies in the benefits but not in the tax allowances which form part of the welfare system, the Government is open to the charge of unfairness. The real value of child benefit, in reality a substitute for child tax allowances, is to be cut by nearly 5 per cent., yet the Chancellor recently raised the married man's tax allowance, enjoyed by couples without children, by twice the rate of inflation.
In truth, the married man's tax allowance has been increased by about 17 per cent. — that is, if it was increased by the statutory price-linked formula which the Government use—whereas child benefit is 3 per cent. lower in real terms — that is, if it was pitched in accordance with that formula. That demonstrates how, long-term, the fiscal trend under Tory policies has worked against families.

Mr. John Butterfill: When does the hon. Gentleman intend to depart from the brief prepared by the Child Poverty Action Group? Is he aware that most of us have read it?

Mr. Meacher: I am pleased to hear that. I hope that many Conservative Members, including the Secretary of State, will read it, because it represents a devastating indictment of the Government's social policies. If the Secretary of State read more documents such as that at bedtime, rather than the briefs from his Department, we might get better policies from him.
I quote again from the document, this time from the Conservative Women's National Committee, the publications of which I do not normally read. In a passionate plea on behalf of child benefit, that organisation said:
We recommend that as economic circumstances permit, child benefit is increased in line with increases in tax allowances, or at least protected against rising prices.
Poor old Emma Nicholson. She really did her best among the upper echelons of Conservative women. Just her luck that the present Government are led by a women who happens to be more like a man. [HON. MEMBERS: "Sexist."] I am sure that the Prime Minister will be delighted by that reaction from the Government Benches.
There is a further important reason why this attack on child benefit cannot be justified on the grounds of public expenditure costs, which is what I suspect the argument is really all about. Even if child benefit had been indexed fully in line with inflation—as we believe it should have been—expenditure on it would still be falling in real terms. That is because the number of children qualifying for it has been, and still is, falling. It fell by 1 million in the six years up to 1984, and that reduction saved about £300 million at present benefit rates. Moreover, the number will continue to decline in the immediate future because of the relatively low birth rates of the late 1960s.
All of that is in addition to the fact that the Conservatives have cut spending on child support since 1979 by allowing child benefit to fall below its 1979 level during the period up to the November 1983 uprating, and by the steady and continuing reduction in the real value of child support for national insurance beneficiaries. For those reasons, there is absolutely no excuse today, in expenditure terms, for chopping back child benefit even further.

Mrs. Edwina Currie: The hon. Gentleman referred to the position in 1979 and then carefully spoke of the November 1983 uprating. Is he aware that in that uprating, and in the November 1984 uprating, the resulting real value of child benefit was higher than in any year under any Labour Government back to 1951?

Mr. Meacher: Quite, and we are approaching November 1985. It is true that at November 1984 prices the value of child benefit rose to £6·85, the level from which it is now being increased. That is marginally, by 15p, above the level in April 1979. However, at November 1984 prices, in the same real terms, it is now to be lowered to £6·57. That is precisely our objection. Child benefit is not being increased steadily in line with rising prosperity and increasing growth, as we are always being told, but is being lowered.
There is even less excuse for any cut in child benefit. The Government are mortgaged to the hilt in terms of promises about child benefit. The previous Secretary of State for Social Services, the right hon, Member for Wanstead and Woodford (Mr. Jenkin) said in 1980:
We are committed to the child benefit system and it is our intention, subject to economic and other circumstances, to uprate child benefit each year to maintain its value." — [Official Report, 28 July 1980. Vol. 989, c. 1063.]
Perhaps we should now ask: are the Government saying that the economy is in a worse shape than in 1980, so that the promise of the then Secretary of State no longer holds good? Otherwise, we should like to know how their actions are justified.
Equally important, I quote from the letter from the 38 organisations, including the National Federation of Women of Great Britain, to the Prime Minister in March this year. The letter reminded the Prime Minister of her pre-election assurance:
there are no plans to make any changes to the basis on which child benefit is paid or calculated.
Nothing could be more unequivocal than that. Moreover, the letter went on to say:
In our view, the retention of child benefit, paid at a reduced level in real terms, alongside a restructured system of meanstested child support would mean a 'change in the basis of that benefit'. The Government would be seen, we believe, to be paying lipservice only to the principle of a benefit for all children, and would be widely suspected of intending to allow the reduced universal benefit to decline in value until it withered away and was replaced entirely by meanstested provision.
In a nutshell, that is exactly what is happening, despite all the Government's solemn pledges which are churned out like confetti before an election and then disappear like snowflakes on a boiler after it.
What is most worrying is that this attack on child benefit is not a "blip"—to use a word which I believe is beloved of the Chancellor of the Exchequer—but part of a calculated long-term strategy on the part of the Government to run down child benefit. I quote from paragraph 4.49 of the Green Paper, which is a very important statement by the Government:
The Government believe that it will be right to give greater priority to assistance for families in the income range covered by family credit than to the assistance given to families as a whole through child benefit. We will therefore have regard to the need to concentrate resources in this area … in determining the overall level of child benefit.
That says it all. Today we are debating the beginning of the end of child benefit. All that I would add is that to embark on this strategy—

The Secretary of State for Social Services (Mr. Norman Fowler): As the hon. Gentleman is about to conclude, are we to understand that we shall have this debate without him informing us of his own policy in this area? Does the hon. Gentleman still stand by the pledge that he made only two months ago to abolish the married man's tax allowance?

Mr. Meacher: I shall certainly outline not only our future policies but what we have done in the past. In April 1974 the Labour Government inherited child benefit at £5·14, at November 1984 prices. We increased that to £6·70. We shall not cut child benefit. We shall seek to increase it, not in line with prices as we did previously, but to do better than that. We stand on our record. If only the right hon. Gentleman could do the same. He inherited the level of £6·70, and it will fall this November to about £6·57.

Mr. Fowler: The hon. Gentleman said in a statement only two months ago that he would double child benefit and abolish the married man's tax allowance. Are we to understand from what he has just said that that part of his policy has been abandoned?

Mr. Meacher: I think that the right hon. Gentleman is used to the terminology of Green Papers. I hope he believes that Green Papers are the subject of consultation. I made it clear that the document I released was not party policy, but a consultative paper. There should be serious consultation about whether we spend £4·5 billion on the married man's tax allowance, which is in no way concentrated on those who need the money, instead of increasing child benefit, which is far and away the most cost-effective and direct way of assisting those in need. That is a serious question, and if the right hon. Gentleman seeks to make a mockery of it I think that his view will be taken into account by the people of this country.
It is a travesty of consultation that the Secretary of State, having issued a Green Paper, which we presume is for consultation, embarks on carrying out the policy with his first statement no less than two weeks after he issued the Green Paper. Is that his idea of a Green Paper and consultation? That is also a pointer to the shape of things to come from the Green Paper. So far we have been given no figures from the right hon. Gentleman's policy document, after the most important review of the welfare state for 40 years, except for two. One is a £500 million cut in housing benefit, and now we have a £175 million cut in child benefit. It does not exactly fill us with a great deal of confidence as we await the rest.
It is our contention in this debate that the Government's family policy—if I can dignify it with that title£is fundamentally flawed and misconceived. In seeking to justify the cut, the Prime Minister argued on 20 June that the alternative to raising tax thresholds is
of particular benefit to families".£[Official Report, 20 June 1985; Vol. 81, c. 433.]
It cannot be said too often and too strongly that that is absolutely wrong. An increase in tax thresholds gives most money to the highest paid and least to the low-paid lifted out of tax, while the half a million working families with children below the tax threshold gain absolutely nothing. An increase in child benefit, on the other hand, is pound for pound a far more discriminating way of assisting families and concentrating help on low-paid families in need.
Even the Government's Green Paper accepts, at paragraph 4.44, that
Child benefit is simple, well understood and popular.
Yet, perversely, the Government now want to give higher priority to family income supplement, which is complicated, poorly understood and unpopular, and moreover, worsens the poverty trap. Not only that, but the problems associated with FIS will be compounded by the shift to the proposed family credit scheme. In particular, not only will payment through the pay packet be used. I suspect, to subsidise low-pay employers, but the benefit is less likely to be spent on the children, and the take-up could be reduced still further.
Last November the Government clawed back £1 a week from pensioners on supplementary benefit who were getting heating allowances. This June they are clawing back £1 a week from families with three children. That cut further threatens the diet and health of children, especially since the Government have already withdrawn school milk and run down school meals, when one third of all children in our society are in families living either at or only just above the Government's own poverty line. It is not a policy for families; it is a policy for cutbacks at the expense of families. Because 7 million mothers and 12 million children will lose, I earnestly and unhesitatingly request every Member of the House who cares about families to vote for our motion.

The Secretary of State for Social Services (Mr. Norman Fowler): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
endorses the Government's commitment to maintain Child Benefit as a universal benefit paid to all mothers as a contribution to the cost of bringing up children; notes that an additional £2 billion will be spent on benefits as a result of the uprating in November; welcomes the additional help that will be provided for low income families with children and welcomes the proposals for a simpler and more effective benefit structure which will result from the Government's recent review.
I am considerably underwhelmed by the speech of the hon. Member for Oldham, West (Mr. Meacher). When he started, three Labour Members were present on the Back Benches. The numbers have increased a little, but even now are not into double figures—Ascot has ended and Wimbledon has begun.
Everyone knows that the hon. Gentleman's attack is a sham. The trouble with him is that he now speaks in such perpetual hyperbole that he is losing all contact with the real world. He complains of the uprating statement last week as being another attack on the welfare state. But what did the statement say?
The statement set out an increase in spending of over £2 billion a year, taking total social security spending to over £42 billion a year — one third of all public spending. That is a real increase in spending of over 30 per cent. since 1979. The statement set out an increase of £4 a week in the pension for a married couple and £2·50 for the single pensioner—increases which benefit over 9 million pensioners. The statement set out a 7 per cent. increase in unemployment benefit and a 12 per cent. increase for those on invalidity pension.
That is the real context of this debate — and the debate that is to follow on housing benefit. The uprating represents not a cut in spending on social security but the payment of over £500 million more than was originally


planned for social security spending. Those resources have been directed at some of the families most in need. That is right, and I make no apology for our priority.
There is one fundamental point to make, which I sought to raise with the hon. Gentleman towards the end of his speech. We are now past the stage when the Opposition can get by simply by letting loose the hon. Member for Oldham, West to set out a shopping list of aspirations—and then repudiate those of his policies that lack instant consumer appeal. We are now at the stage where serious debate has to be joined about our objectives in social security policy and about the best methods to achieve them. For the Opposition, that means moving from generalised aims to particular policies. The trouble is, to judge from the hon. Gentleman's speech, all that that means is a move from the incoherent to the incredible.
Over the past few weeks, we have heard one call after another for more spending. According to the hon. Gentleman, virtually every part of the social security budget will be increased by billions of pounds. On child benefit alone, two months ago the hon. Gentleman proposed to spend an extra £4·5 billion a year and to pay for that simply by abolishing the married man's tax allowance. We should be clear what the effect of this would be. For 10 million couples, it would mean an increase of about £7 a week in their tax bill. For the 5 million without children it would mean a £7 a week cut in their income.
What I find even more than usually extraordinary about the hon. Gentleman's speech is that he utters vague generalisations about tax and social security but has not bothered to put any of his comments on the Government's record into that context. In particular, he has not looked at the effect of total policies in the lower income sector which is, of course, crucial in the whole rationale of child benefit. In other words, one cannot look at child benefit in isolation. One also needs to take into account what else has happened in terms of the tax system. Several things have happened. Tax thresholds are now 20 per cent. higher in real terms than they were in 1978–79. In other words, married taxpayers paying at the standard rate are £3·30 a week better off because of what we have achieved in raising the real level of thresholds. Those with working wives are £5·40 a week better off. In the context of this debate, it is right to point to that achievement.

Mr. Robert Hughes: I accept that one should look at matters in the round. Therefore, will the right hon. Gentleman look at the position of taxpayers to see how much indirect taxation they have to pay as a result of switches of Government policy from direct to indirect taxation? Will he look at the increase in rents that the Government have forced upon people and take into account the increasing rate burden imposed by the Government, and then tell us whether people are individually better off or worse off in their net tax burden since the Tories came into office?

Mr. Fowler: I would gladly do all those things, but it is sensible, when talking about child benefit in particular — we all remember the history and rationale of child benefit, which was to bring help particularly to those in the low income sector—to look at the tax position as well. At the same time we should examine the national insurance position.
The changes in the structure of national insurance contributions announced in the last Budget will also give extra help to those on low incomes. For the lowest paid, they almost halve national insurance rates, and for people earning under £90 a week they will mean increases in net income ranging from £1·10 to £2·18 a week. That is effective and immediate help directed at those on low incomes.
Therefore, the context of this debate is a £2 billion uprating of social security, a raising of tax thresholds with the effect that 1·25 million people have been taken out of tax altogether and a reduction in national insurance in this year's Budget of 3·5 million low wage earners.

Mr. Tony Marlow: I am sorry to interrupt my right hon. Friend so early, and I am grateful to him for giving way. Before he altogether leaves the married man's tax allowance, can he answer this point? In today's society, is it really sensible if, when two individuals, both working, get married, they have an increase in their tax allowance? As Secretary of State for Social Services, would not my right hon. Friend rather that the money that is lost in that tax allowance could be spent somehow on families?

Mr. Meacher: Ah.

Mr. Marlow: Would it not be a good idea if we moved it more towards a child tax allowance, as we have in the past?

Mr. Fowler: I see that the hon. Member for Oldham, West now wants child tax allowances to be considered as well. There appears to be no end to his flexibility on what his policy will be. I accept that there are issues that have to be examined; that is why the Green Paper on personal taxation that my right hon. Friend the Chancellor of the Exchequer is bringing forward later this year will look at this sector. That is the right context.

Mr. Frank Field: The right hon. Gentleman has just made two very important points, one about raising the tax threshold and one about changes in national insurance contributions, and those changes need to be recognised. Will he take the argument a stage further and admit that neither the raising of the threshold nor the national insurance changes distinguish whether the taxpayers have children and that, over the past 30 years, we have shifted the burden of taxation onto those with children? Before the last election and up until recently, both sides thought that the only way to shift the burden back was to raise child benefit in line with tax thresholds. Is not that an important point, and is not the failure to raise child benefit in line with thresholds a defeat for the Government's policy, which they say is about protecting the family?

Mr. Fowler: It is not remotely a defeat, but I agree with what the hon. Gentleman has said, in a typically sensible intervention. I do not wish the hon. Gentleman any permanent harm by that comment. Clearly, what he says is entirely right. The tax system, and only the tax system, can direct help at low-income families without distinguishing between low-income families with children and those without. The same is true for national insurance. The context of this debate, unlike the picture painted by the hon. Member for Oldham, West is the £2 billion uprating announced last week, and the fact that we have raised the tax threshold and reduced national insurance.
It is against that background that the Government had to decide their priorities on child benefit. We have already made it clear that child benefit should continue as a benefit payable to all families irrespective of their incomes. The greatest priority must be the support of families on low incomes, not the general level of support. It is here that we find some of the most difficult problems—as the review of social security showed—and it is right that this should be our first priority.
That is why we decided to take other measures to get extra help to low-income families. The result is that we have made two important changes to the family income supplement scheme. Two hundred thousand families stand to gain from these changes—those with older children will gain most. We have increased the allowances in the scheme by at least £1 more than the 7 per cent. increase in prices would have justified. That will mean that the benefit payable at a given level of income could be £3·75 per week higher for a one-child family and £4·50 per week higher for a two-child family.
Wherever we divide on this, I think that the hon. Member for Oldham, West will agree at least with this step—that we have, for the first time, introduced some age relation into the family income supplement system. At present, the allowances for children are the same whatever the age of the child. That is in marked contrast to the supplementary benefit rates, which rightly give more help to those with older children. This gives rise to some of the more extreme effects of the unemployment trap—the help available for a child through family income supplement is well below the help provided for a teenage child through supplementary benefit. By increasing the prescribed amounts for a child aged 11 to 15 by £1 per week, and for a child aged 16 or over by £2 a week, we will be taking the first step to reducing that problem. It is of course a first step to reduce a problem which many people previously recognised.
I also announced last week a further real increase in the child need allowance in housing benefit. That is the amount of extra income which is assumed to be needed for each child in assessing entitlement to benefit. At its new level of £14.50 — a £1 a week real increase — the allowance, although not age-related, will be much closer to the scale rate for older children in supplementary benefit. The change will also benefit more than 500,000 families with children in receipt of standard housing benefit and increase entitlement by up to 40p per child per week.
The hon. Member for Oldham, West failed to mention the increase of one-parent benefit from £4·25 per week to £4·55, the fully uprated child scale rates in supplementary benefit and the child dependency additions payable with national insurance benefits.

Mr. Meacher: Will the Secretary of State nevertheless confirm that the point I was making — that those 200,000 families who do not receive family income supplement will not get any of those extra benefits? Secondly, even if they are getting family income supplement, the fact that there is a connection between housing benefit and family income supplement, and that family income is taken into account in assessing for housing benefits, means that the increase in the housing benefit child need allowance will be outweighed by the downgrading of housing benefit because of the

relationship with housing benefit. The net result will not be a gain, even for those very few families who are most favoured by the right hon. Gentleman's changes.

Mr. Fowler: The hon. Member has not got it quite right. With regard to housing benefit, children on supplementary benefit will not lose at all. As for the housing benefit rates taper and the changes to which the hon. Gentleman referred, those below the needs allowance will not lose either.
Perhaps I might give the hon. Gentleman an example of what will happen. A family earning £80 a week and with two teenage children gets £10 of benefit a week. Under the new system that I am introducing as a result of the uprating, the benefit for that family will increase to £15·50. I accept that family income supplement is not conceivably an end to the matter — we should not be making our family credit proposals in the Green Paper if it were. We have already said that we intend to do more to improve the circumstances of low-income working families with children.

Mr. Gordon Brown: Will the right hon. Gentleman give way?

Mr. Fowler: I shall not give way again as I should like to get on. The new family credit scheme would aim to eliminate families with children finding themselves worse off in work than on supplementary benefit, to prevent any family facing a marginal tax rate of more than 100 per cent. — which completely undermines incentives for people in lower-paid jobs — and to give extra help through the pay packet so that people in lower-paid jobs have their tax and national insurance liability effectively reduced or eliminated.
Those are important social objectives and real improvements in how our social security system works. The Government have made it clear that we regard a universal child benefit as important.

Mr. Frank Field: But not very important.

Mr. Fowler: It is the only recognition in our tax or benefit system of the extra responsibilities borne by all of those who are bringing up children. They are recognised in almost all western European countries that I have visited and whose social security systems I have seen. We must keep that general support in proportion, however. I see no reason why we should provide help to all families with children at the level appropriate to those families most in need of help. The Government are proposing a general level of help and additional help for families most in need.
I find no great attraction in the option, which the hon. Member for Oldham, West trailed, of increasing child benefit in order to tax it, as the hon. Gentleman appeared to suggest on the BBC "Newsnight" programme last week. Doubling and then taxing child benefit would increase public expenditure by about £4·5 billion. Even allowing for the extra tax revenue, the cost would rise by £1·5 billion to about £6 billion a year. The result would be a savage cut in effective tax thresholds—for all families with children, the point at which earnings would be subject to tax would be reduced by about £725 per child. That would mean an increase in tax, at standard rate, of almost £220 a year.

Mr. Meacher: The right hon. Gentleman totally misunderstands what I said. I did not say that child benefit would be increased and taxed with the current income tax


structure. As the Minister of State, who was present, ought to know, I argued that it could seriously and valuably be done only in the context of a different type of income tax structure.

Mr. Fowler: If the hon. Gentleman does not mind my saying so, the House is in some difficulty about what he means, because he keeps changing his story. [Interruption.] The hon. Member for Holborn and St. Pancras (Mr. Dobson) doubtless wants to give the hon. Gentleman his support, but I am sure that the hon. Gentleman can look after himself. Two months ago the hon. Gentleman set out in a Green Paper, which he described as a document which would pre-empt the Government's proposals—

Mr. Frank Field: More green than the right hon. Gentleman's.

Mr. Fowler: That is probably right, and as I understand it, that sentiment is shared by the whole shadow Cabinet.
The fact is that on "Newsnight" the hon. Gentleman said that we can pay universal benefit such as child benefit to everyone and then concentrate it on those in the greatest need without a means test by taxing the benefit.

Mr. Meacher: On a different income tax structure.

Mr. Fowler: I hear what the hon. Gentleman said, but that is not in the quotation. I am delighted to know that he has ambitions to change not only the social security system, but the tax system. He now wishes to change the structure of income tax. Has the hon. Gentleman got those proposals past the Shadow Cabinet yet? Would he like to intervene and tell me what those proposals are for the change of the income tax structure? His silence speaks volumes.
The Government want to see child benefit at a reasonable level, payable to all families irrespective of means.

Mr. Gordon Brown: rose—

Mr. Fowler: I shall not give way.
The Government want to see full provision for those with children on supplementary benefit, a more effective system for working families with lower incomes to help with the greater pressures they face, and a continuing reduction in the burden of tax on the lower paid. Our policies and plans are clear, both in the short term and in the proposals that we have put forward for the long term. Our policies are based on a clear view of priorities—in particular, our aim to direct more help towards low-income working families. Our policies also recognise the need to find a balance between benefit levels capable of meeting those objectives and what the taxpayer can afford.
In contrast, we have the approach of the hon. Member for Oldham, West. I do not see what the point is of his coming to the Dispatch Box time after time with promises of spending increases, if he can never provide an adequate answer about how the money will be raised. I do not see the point of his promising money for benefits, if the consequence is to bring down tax thresholds, to drag more people into tax, and to take the benefit money away in higher taxation.
As a result of the uprating system, the Government will spend more than £42 billion a year on the social security

budget. Even by the hon. Gentleman's definition, that is not a cut in social security. It is an increase in spending of more than £2 billion a year.

Mr. Frank Dobson (Holborn and St. Pancras): The cost of unemployment.

Mr. Fowler: The hon. Gentleman is wholly wrong. It shows his complete ignorance of social security, which goes hand in hand with his complete ignorance of health policy. Our policies represent the Government's practical commitment to help people, such as the retired, the unemployed—

Mr. Dobson: Will the right hon. Gentleman tell the House what the figures would be if unemployment had remained at the level it was when the Tory Government took power in 1979?

Mr. Fowler: The 30 per cent. real increase in spending from 1979 to today has partly been because of the increase in unemployment, but also because of a real increase in benefits and because there are more beneficiaries, such as the 850,000 extra pensioners.

Mr. Dobson: The right hon. Gentleman is now taking credit for people growing old.

Mr. Fowler: The hon. Gentleman does not understand what I am saying, which is that the Government certainly face their commitments and fulfil them.
We have retained child benefit as a universal benefit paid to the mother, but in addition, the Government are tackling the real problem of bringing extra help to low-income families with children. In the uprating, we are achieving that notably with the help of the family income supplement system. In future, thanks to the review of social security, we shall be able to use the new family credit scheme.
The Government's record is one of giving help and support to families with children, both through the benefit and the tax systems. It is a record that we shall maintain in the future.

Mr. Frank Field: The Secretary of State made much of the size of the increase in the social security budget, and he was undoubtedly wise to do so. However, he did not tell the House about the £2 billion increase in social security benefits most of which he had to bring about because of the social security laws. He did not mention that in areas where the Government have discretion, and where there is no legal commitment to keep benefits in line with rises in prices or tax thresholds, such as with child benefit, there have been cuts. Had past commitments to these benefits been fulfilled he would have announced not a £2 billion increase, but a £2·25 billion increase in social security payments. Yet again there has been a cut in the rate of increase in benefits.

Mr. Nicholas Winterton: It is not a cut.

Mr. Field: If the hon. Gentleman were as diligent in his attendance in the House at these debates as he is in the Select Committee, he would know that I have never claimed that there have been cuts, in the old-fashioned sense, but that we have been talking about cuts in the rate of increase in benefits.
Today we face a major change in the Government's stance. For the first time the Secretary of State has not


made the Government's traditional defence on child benefit. Historically, both Front Benches have advanced powerful arguments why child benefit should be increased, not just in line with prices, which has not occurred this time, but, more important, in line with increases in tax thresholds. I thought that there had been agreement on that, but it appears from the debate that that agreement no longer exists.
During the past 30 years there has been a shift in the tax burden, and that has happened irrespective of which party make up the Government. While the tax burden has risen for all taxpayers, it has risen fastest for those with children. Until today's debate Ministers stood at the Dispatch Box and said that the only effective way of maintaining tax equity between those with responsibility for children and those without was to increase child benefit in line with tax thresholds. We have now reached an important divide, and the Government no longer believe that that is the most effective way. Yet they have not said what from now on their policy will be on redressing the tax burden, so that we reduce it faster for those with children than for those without.

Mr. Tony Favell: I have listened to the hon. Gentleman with interest. Does he accept that many better-off people with children—my family included—would willingly forgo a greater rate of increase in child benefit to help those who are less fortunate?

Mr. Field: I shall come to that point. The hon. Gentleman is not as well off as he would be if he did not have children. That is crucial and we must keep it in mind. Just as the hon. Member for Derbyshire, South (Mrs. Currie) was right to talk about the real increase and the real value of child benefit under the Government, we need to look at what that level would have been, had child benefit been increased in line with the rise in tax thresholds for single people and married couples.
The second argument that the Government have always used in these debates, although not today, is that child benefit is the most effective way of tackling family poverty. It is a major change that the Government will now rely on the family income supplement and on the new family credit scheme.
The Government were silent today on the third reason usually put forward by both sides of the House on the importance of child benefit—to maintain and increase incentives to work. There was no mention in the Secretary of State's speech that this is now an important objective of Government policy. He was wise not to say so, because he knows that the more the Government rely on means-tested benefits the more difficult it will be to maintain, let alone increase, the incentive to work. Yet this is a problem that many poor families face.
The fourth reason that binds or used to bind both sides of the House is that child benefit is one way to ensure that the money goes not to the man but to the woman.
The Opposition do not say that, since 1979, the Government have reduced child benefit below what it was under a previous Government. However, had the Government maintained their pledge to keep child benefit in line with rising tax thresholds—the threshold for a single person has risen by almost 90 per cent. —child benefit should have risen by an equal amount, but it has not. It has risen by only 75 per cent., which is a cut and a shift in the burden of taxation from those without children to those with children.
Not only have the Government changed their argument about the defence of child benefit, but it is significant that when the Secretary of State announced the increase in child benefit, small though it was, there was no pro-child benefit lobby among Conservative Members. No Conservative Member criticised the Secretary of State for failing to increase child benefit in line with tax threshold increases. Far from it. The only Conservatives to speak were those asked the Secretary of State to rein back and cut child benefit still further. The organisations that are in business to protect and promote child benefit must now realise from recent debates that, for the first time in 15 or 20 years, there is no Conservative lobby in favour of the benefit. This damaging position must be quickly repaired.
From the uprating statement and from today's statement, we do not know whether the Government have made a once-for-all change in policy or whether the cuts in child benefit will recur in future years. The saving in child benefit is £175 million. My guess is that the Secretary of State has fought his corner in Cabinet to get those funds for his new family credit. We should like to know whether the Secretary of State envisages future cuts in child benefit to pay for even larger resources for the family credit scheme, or whether he was forced to agree to a cut just for this year in order to initiate the scheme. This is an important point, because the anger that we are expressing in this debate about the cut in child benefit mitigated if it is a once-for-all cut. But it is a different matter if the Secretary of State envisages further cuts in the future to finance the new scheme. I shall happily give way to the Minister to respond to this point.

Mr. Fowler: I am listening.

Mr. Field: The right hon. Gentleman prefers not to respond, but I am pleased that he is listening.
Without the active support for child benefit on the Tory Benches, those of us who put a premium on the benefit must look to the future and adjust our position accordingly—

Hon. Members: Where are they?

Mr. D. N. Campbell-Savours: 

Housing Benefit

Mr. Speaker: I have to inform the House that I have selected the amendment in the name of the Prime Minister.

Mrs. Margaret Beckett: I beg to move,
That this House condemns the Government's record on Housing Benefit which brought administrative chaos when it was introduced and has since been repeatedly cut with the result that pensioners and poorer families have been deprived of essential help with housing costs; and opposes further proposals in the social security reviews which would bring further cuts and greater poverty.
The history of housing benefit has been one of the most extraordinary—and and that is saying something—in the lifetime of this Government. The Government have been warned consistently about the structure of the benefit itself and about the problems created by the timing of the changes that they propose. Consistently, the Government have ignored the warnings and now, in their amendment, they blandly try to take credit for simplifying the system that they introduced. I shall look first at the proposals that the Government have laid before us and then briefly at their record in this area.
Housing benefit highlights the absurdity of the Government's pretence in the Green Paper, that no figures are available for the changes that they have discussed. Not only have examples been given of a joint taper of 70 per cent. that might be proposed, but we have been told what losses or cuts the Government expect to make from their housing benefit proposals. They expect to save some £500 million.
On the basis of the 70 per cent. example given in the Green Paper, I understand that a pensioner couple on about £75 a week would lose the whole of their present rebate of almost £5. Similarly, a married couple with two children on £110 a week, which is not a large sum by anybody's standards, would also lose all or most of their present rebate, again of almost £5. Those are substantial sums for people on such incomes, particularly for those who are trying to raise children.
One of the first things that we hope to hear from the Government in the debate is whether those figures are accurate and how great the damage to claimants will be. The Government know that they will save £500 million but they claim that they do not know who will contribute to the savings. They do not know how they will contribute to the savings or how much each particular group will lose in order to make that contribution. My first quesion is: is there any further titbit of information that the Under-Secretary can give us about the numbers of gainers and losers? If not, why not? If not, the unworthy thought occurs to us that it may be because of the contrast between the review team's proposals and those of the Government, and perhaps more because of the effects of the review team's proposals.
In the recommendations from the carefully selected group that carried out the review, we were told that about one third of those who get housing benefits would lose, although about one quarter — a smaller, but still substantial, number—might gain. However, when the review team suggested that there might be somewhat more losers than gainers, and that that was the order of magnitude, it was on the basis that the same money would be available from the scheme as a whole, and that there

would be separate rent and rates tapers. Even with those provisos, the review team identified losses for what was reckoned to be 3 million people who now receive housing benefits.
The Government are not making the same proposals. They are proposing not nil-cost changes, but changes that will save at least £500 million. Nor are the Government proposing separate rent and rates tapers—they are going for a joint taper. On rebates alone, it looks as if the Government's proposals will mean losses for 5 million people. On rent and rate rebates, it looks likely that about 7 million people will suffer losses in their housing benefit.
If those figures are incorrect, we should be happy to learn from the Minister what the real figures are, but the Government's reluctance so far to give us any information makes us suspect that those figures may be accurate. Of the 5 million to 7 million people who will lose benefit, it has been estimated that between 1 million and almost 2 million will lose all entitlement to any housing benefit.
That brings me to the second question that I should like to ask the Minister, which is in two parts. First, I noticed that on Monday his hon. Friend the Minister for Social Security said in a reply to my hon. Friend the Member for Dunfermline, East (Mr. Brown) that the £500 million savings that the Government hope to gain may be drawn over a period. The first thing that we want to know is, what period?
Secondly, what we should most like to know is whether the £500 million savings quoted by the Secretary of State include the savings from the proposal that claimants pay at least 20 per cent. of their rates. It has been estimated that taking 20 per cent. of rates from claimants would bring in some £250 million. If that is part of the £500 million, we accept that it is a substantial part of it, although we would argue that it is an unjust proposal. However, if it is not part of the £500 million, it means that we are talking about savings of some £750 million, an increase of 50 per cent. on the savings that the Government have admitted, so far, that they wish to make.
We are talking about enormous sums—more than the Government have already saved in the many cuts that they have made in housing benefit in the past couple of years. The savings through the 20 per cent. of rates proposal will be more than the Chancellor tried to cut from housing benefit in July 1983, just after a general election campaign in which he told us how terrific our economic performance was, and that roses and gaiety were around the corner. Sadly, only a month or so later, he had to introduce cuts in housing benefit. We are talking about even greater cuts than those.
These large savings do not result from the recommendations of the Government's review body, and this applies particularly to the proposal to take 20 per cent. "at least", to use the Government's phraseology, in rates. The review body said:
100 per cent. help with housing costs for those on the lowest incomes is the only fair way of meeting their needs within the present vagaries of the housing market.
We wholeheartedly support that view.
We know that the Government intend to remove help with water rates while at the same time, with another hat on, they are forcing up the water rates. Is there any intention to offer any recompense to those claimants who will be asked to pay 20 per cent. of their rates, even at the level of the rough justice of an average figure, which will be disadvantageous to those in areas with high rates?
Apart from the proposals to take 20 per cent. of rates from claimants, we also oppose the severity of the proposed rate taper. Here, both the Government and the review team are guilty of peculiar logic. In the phrase much beloved of the Government, they say that the rate taper goes too far up the income scale. Their justification for that is that it goes further up the income scale than the rate taper. However, the only reason for that is the Government's cuts in April 1983, April 1984 and November 1984. They have used the cuts that they made to justify further cuts in the rate taper.
The proposal for such a combined sharp taper will hit most the least well off owner-occupiers who get help only with their rates, and who so often figure among those groups for whom the Government claim to have concern. Again, the Government and the review team part company. The review team proposed to sharpen the rates taper. Although we question its logic in doing so, it also proposed that some form of what one could call rent rebate—in other words, some other help—should be available to all owner-occupiers, so that the impact of the reduced rate rebate that it proposed would have been diminished. Characteristically, the Government have taken the proposal for cuts and left out the proposal for improvement. Once again, one of their hand-picked review teams has gone too far and been too generous for the Government's liking.
It seems that the Government may further restrict the entitlement of those on supplementary benefit for help with mortgages, although they must be aware that that is bound to lead to an increase in the number of evictions. I understand that the number of people in serious arrears, which was running at 8,400 in 1979, rose to 29,000 last year. That is under a Government who claim to be devoted to encouraging owner-occupation. Proposals such as those that the Government are making can only lead to these figures rising, and to increases in evictions.

Mr. Roland Boyes: Is it not a fact that in 1984, according to building society figures, there were 11,000 repossessions? A number of those people will find themselves on the homeless lists, and a number will come under board and lodgings regulations. The Government had to admit this week that they had got those regulations wrong. Is there not a strong possibility that they have also got this proposal wrong?

Mrs. Beckett: My hon. Friend is correct, and it is an unfortunate feature of the Government's housing and social security policies that they continually create conditions of whose affects they then complain.
Another action proposed by the Government that will create substantial disadvantages is the proposal to remove from local authorities the discretion they have to give greater help to particular groups. As local authorities seem mostly to exercise, that discretion to the benefit of groups such as widows and war pensioners, about whom the Government claim to be concerned, this is a strange proposal for the Government to introduce. How many gainers and losers will there be from the proposals to remove that discretion from local authorities?
How many gainers and losers are there likely to be from the effects of removing the extra help available for those in high-rent areas? I seem to recall that last March, when we were discussing the changes that the Government were then making in the proposals for high rents, some 120,000

people were being affected. Presumably, those people are likely to be affected, all of them for the worse, by the Government's proposals and in some areas undoubtedly substantial sums could be involved for the individuals who will be affected.
All these proposals are particularly disgraceful because they follow the removal of the Government's general subsidy, which has forced up rents. We are horrified and appalled at the thought that the Government are likely to try to take as much as £500 million from housing benefit. Since 1979, they have already taken about £1,300 million from general subsidies for housing and councils' housing revenue accounts. This follows the pattern identified by my hon. Friend the Member for Houghton and Washington (Mr. Boyes).
When the Government began this process of cutting the general subsidy to housing accounts, they gave reasons that may sound remarkably familiar. They said that it was better to cut the general subsidy because then they would be able to target help on the poorest through housing benefit. Having cut the general subsidy, and increased rents so that more people were forced to draw housing benefit, they then forgot about targeting help on the poorest, and said that, as too many people were claiming housing benefit, that would be cut.
In these curcumstances, it is no wonder that not only the Labour party but all who are on benefits regard the Government's talk about targeting and efficiency with considerable cynicism. They know that targeting and efficiency, may be the buzz words for cuts this year, but next year and the year after the Government will have different buzz words, although they will be pursuing the same policy.

Mr. Roger Gale: Does the hon. Lady concede that the purpose of social benefit is to help those in most need and that therefore targeting is worth while if the system is to be effective?

Mrs. Beckett: The hon. Gentleman has fallen prey to a delusion common to Conservative Members. The words he used, and the description he gave, have been given for every mean-minded poor law system since time began. The idea of the welfare state is not what the hon. Gentleman identifies.

Mr. Gale: The hon. Lady is ducking the question.

Mrs. Beckett: I am not ducking the question. I am not surprised that the hon. Gentleman does not understand, because the policies of his Government show every sign not only of a lack of understanding but of their wish to destroy the welfare state. The whole point of the welfare state is that it is for everybody—everybody pays as much as he can when he can, and everybody should have the right to draw when he has a need. That is what the welfare state is about, and it is because it is about everybody being able to draw to the extent that he needs when he has need that it is more expensive. The welfare state is not just for the poorest.
Surely the Government are not claiming that, under them, anybody who has need can draw benefit. Over 1 million people have lost entitlement to housing benefit since 1983. These people had need and were drawing benefit and they have lost the money only because the Government have made cuts so that they could give more


away in tax handouts to the wealthy. If the hon. Member for Thanet, North (Mr. Gale) does not understand that, he does not understand the welfare state.

Mr. Gale: Answer the question.

Mrs. Beckett: I have answered the question. The hon. Gentleman does not understand anything about the welfare state or the reasons why most people attach such value to it. Fortunately, it is a loss that will cost him and his party dear.
Over the past couple of years, the Government have taken 1 million people out of housing benefit entitlement. The numbers of claimants have grown only because of the failure of the Government's economic and housing policies—a failure that, characteristically, they blame on everybody but themselves. However, the penalty for that failure they exact from claimants. The Government's proposals are also likely to cause problems for local authorities.
The subsidies for housing benefit, now 100 per cent., though less in some cases, will be cut to 80 per cent. From what we can discover — the Government give no justification—this is an arbitrary figure. As I am sure the Minister is aware, local authorities believe that this will mean substantial cuts in the sums made available to them. Will local authorities lose money, because of the change in the subsidy offered to them? If so, what is the justification?
Local authorities will lose the 60 per cent. grant that they were given towards the cost of administering the scheme—yet another flagrant breach of an undertaking which the Government gave only a couple of years ago, when the scheme was introduced. This is another extraordinary example of how the Government are proceeding. In the same Green Paper, the Government have reduced the money local authorities receive in subsidies for administration and they have had the cheek to say that claimants have got to pay at least 20 per cent. of rates to encourage them to press authorities to reduce the costs that the Government have just increased by the proposed administrative changes. Not the least of these is the burden of collecting the 20 per cent. deduction from, I understand, some 2·5 million households. The Government then have the unmitigated gall to tell local authorities that they are reducing this 60 per cent. subsidy, not—perish the thought—just to save money, but to
provide a greater incentive to local authorities to contain costs and improve efficiency".
The local authorities are less than amused by the gall of the Government. Local authorities never wanted the housing benefits scheme as it was introduced, and they have consistently told the Government that they have not been allowed enough time or enough funds to run the scheme properly. The permanent secretary to the Minister's Department admitted that to the House recently. The Government have now taken the subsidy away from the local authorities, they say to encourage local authorities to improve efficiency. This is similar to the nonsense that we heard about the National Health Service, and it is equally unwelcome.
The justification which is continually cited for cutting housing benefit is that benefit is paid too far up the income scale. May I remind the Minister again—we cannot get this on record too often — that, for those who pay

average rents, all entitlement to benefit for a two-child family is lost at more than £40 below average national wages. Those who live in areas where rents are higher have had rents forced up, but they receive housing benefit above that level, perhaps even up to average wages. I assure the Minister that those people would be only too pleased if the Government were to restore the housing subsidies cut so that their rents could be cut and hence there was no need for them to claim housing benefit, only to be abused by the Government for doing so.
We condemn the effects of the proposals in the Green Paper. We find it outrageous that the proposals are put before us in the Green Paper while we are in the middle of a consultation period — a consultation period of a whole four months. That was not excessive, one might have thought, for—what was it?—the most fundamental review since Beverage. But four months is too long for this Government to wait for their policies to come to the House to take effect.
The changes which the Government have proposed in the uprating—it may be an uprating in some benefits but the term is not justified for housing benefit—make exactly the same kind of reductions in rate support that are proposed in the Green Paper, or at least in some of the proposals. It is proposed in the Green Paper to reduce the rates taper to 21 per cent. on net income. However, in the November upratings, when the Government make the rate taper 13 per cent. on gross income, they will carry out the policy which they put forward for consultation in the Green Paper. That is one of the most controversial changes that they have put forward in terms of housing benefit. It is the change that bears hardest on owner-occupiers and it is likely to bear hardest on pensioner owner-occupiers. It was introduced in June, two weeks after the Green Paper, without any opportunity for consultation or reply.
I hope that the Minister will be able to confirm my figures. About 2 million households will lose money from the housing benefit changes and about 500,000 again will lose all entitlement to housing benefit. There is no need for those changes as part of the uprating because, in the scheme that preceded housing benefit, changes and tapers were not made customarily. In this case, they are merely yet another aspect of the Government's desire to make cuts.
I believe that a pensioner couple who are paying £5 in rates a week can now get rate rebate on an income of up to £95 a week but that, from November, under the uprating of which the Secretary of State spoke so warmly today, they will cease to qualify for housing benefit on a gross income of £85 a week—£10 a week less. Many of those who are affected by these latest proposals are the same people who have lost rebates in every cut that the Government have made in the few months since the scheme was introduced, but this cut will be the steepest so far.
I notice—I ought to say this to save the Minister the trouble—that there are some small improvements in the housing benefit scheme. The Minister of State claimed credit for the increase in the dependent child addition, in response to a question asked by my hon. Friend the Member for Dunfermline, East (Mr. Brown). We occasionally give the Government the odd cheer, or perhaps even two cheers, but I do not think that the Government deserve even half a cheer for that. We are singularly bored with giving the Government any cheers for the increase in the child addition, as this is the third


time that it has been before the House. They give the addition, postpone it, take it away altogether and then decide to give it again. Every time they say that they will increase the child addition, they expect a fresh round of applause. Not tonight, I am afraid. That behaviour is typical of the Government's approach to housing benefit, which befits the short title of the party to which they belong—it is a con.
We all know that the Government have made massive cuts in the sums available for housing support, whether through general housing subsidy or, once they managed to cut that, through housing benefit, which many families were forced to take in its place. They know, as do we, that pensioners and less well-off families are bearing the burden of cuts in housing support, but the Government merely increase the burden still more, complain about those who are still able to claim benefits and expect to be congratulated on their compassion.
The housing benefit scheme shows up the Government's incompetence and callousness. The cuts that they are proposing in the November uprating and in the Green Paper will, I am afraid, inflict further damage on claimants. The only advantage is that the cuts may inflict so much damage that they will help us to remove the Government.

The Parliamentary tinder-Secretary of State for Health and Social Security (Mr. Ray Whitney): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof,
welcomes the Government's objective of securing a structure of income-related benefit which will ensure greater equality of help with housing costs for people at the same level of income, whether in or out of work, will remove the need for housing benefit supplement and will be simpler for staff to administer and for claimants to understand.".
After the hysteria of the technique of the hon. Member for Oldham, West (Mr. Meacher), it is something of a relief to have the rather more controlled approach of the hon. Member for Derby, South (Mrs. Beckett). Although the difference is welcome, the basic song is the same. We have the same cries against change—any sort. Indeed, at one point, the hon. Lady seemed to be against the change from the original scheme which failed in the 1970s — the dual scheme of rates and rents and the complications between the Department of Health and Social Security and local authorities. It was a system that the whole of society interested in these matters, including the Supplementary Benefits Commission, thought desperately in need of change. The hon. Lady and her colleagues seem prone to harking back to what they regard as halcyon days.
We also heard the usual rigmarole about cuts in the social security programme. My right hon. Friend reminded the House that, following his uprating that was announced 10 days ago, the social security programme will now run at £42 billion a year. There are significant increases in all major benefits, taking into account the large increase in the number of beneficiaries, who include the unemployed and the 800,000 retirement pensioners. In spite of that, the hon. Lady talks about cuts and the record returns to the familiar topic of destroying the welfare state.

Mr. Gordon Brown: Will the Minister confirm that last week's uprating statement and the parliamentary answers that I have received mean that

2 million people will lose cash as a result of the housing benefit changes, and that 460,000 people will be taken off housing benefit altogether for savings of slightly more than £50 million? Will he tell the House how many people will lose cash, and how many will lose housing benefit to enable the Government to achieve their planned savings of £500 million?

Mr. Whitney: The hon. Gentleman happily makes the point that I am coming to. Opposition Members seem to think that the rates and coverage of every single benefit must be frozen in aspic, except that benefit must always increase. They pay no attention to the real rate of increase in the amount of public money that is devoted to the social security fund.
The hon. Lady follows the leading Labour spokesman on social security in offering no Labour policy, and in simply producing a list of negatives, all of which are ill-founded. We have had a classic demonstration from the hon. Members for Dunfermline, East (Mr. Brown) and for Derby, South that whatever the level, and whether or not the benefit is rising, they would continue to pay benefit money and be irresponsible about the effect of that on the Exchequer.

Mr. Michael Stern: Does my hon. Friend agree that he may be being slightly unfair to the Opposition in saying that they have no policy in this area because their policy in at least part of this area was announced on Monday when they told us that they intended to abolish our board and lodging measure altogether by bringing it within rent control?

Mr. Whitney: My hon. Friend is following the Opposition's announcements closely, and one must keep at them to understand what their policy is. Earlier this evening we explored the fate of the policies announced by the hon. Member for Oldham, West (Mr. Meacher), which were quickly jettisoned by his colleagues.
Clearly, the Government would never lightly reduce any of the benefits that we pay. We clearly understand that we are dealing with the lowest income groups and the poorest sections of society and, as will be observed and as has been demonstrated in the uprating statement which my right hon. Friend announced 10 days ago, all those changes are carefully cushioned. In our budget we have protected all the rates, and housing benefit has doubled in real terms while we have been in office. It now covers not 5·5 million, but 7·5 million people, yet the Opposition continually talk about cuts.
Even after the change in the rates taper to 13 per cent., more than 7 million people will continue to receive housing benefit—more than one household in three. If we take the Opposition at their word, we understand that they will be completely content to allow that sort of spending to continue to increase.
The figures that we were offered recently suggested that this year, in addition to 7·5 million people on housing benefit, there would be a further 300,000. That sort of expansion, both in the amount of expenditure and in the increase in the case load, would be unjustified. We have only to make comparisons with other overseas societies which are wealthier than we are, to see that no system compares in any way with the scope, range and expense of our housing benefit system.
Our aim is to give help where it is needed. Unlike the hon. Lady, we are not confused about precisely what that


means. We understand what targeting means and give help where the need is found, but the hon. Lady clearly found that question uncomfortable and carefully ducked it.

Mr. Frank Field: I am confused by the case that the hon. Gentleman is presenting to the House. Am I right in thinking that the Government claim credit for having increased the sum paid in housing benefit until now, but that at this stage they are cutting that sum? That contrasts vividly with their policy on mortgage interest tax relief, which continues to increase by leaps and bounds.

Mr. Whitney: In a budget of the enormous size of the social security budget, judgments must be made when that budget is increasing at the rate that it is in this particular sector. It makes sense to make adjustments from time to time. Retargeting is the only responsible policy, which is what we would expect from the Government.

Several Hon. Members: rose—

Mr. Whitney: I shall not give way. The hon. Member for Birkenhead asked me two points, and I should like now to deal with mortgage interest tax relief. I would be interested to know the attitude of the Labour party on that matter. Clearly we make no apology for recognising the importance of home ownership. Certainly, it seems that many Opposition Front Bench Members have come to understand that the British people value that policy. Opposition spokesmen are now seeking late in the day to follow us in our policy of home ownership for council tenants. When the hon. Member for Oldham, West suggested the abolition of mortgage interest tax relief, it took only hours before that policy was squashed.
We recognise that a balance must be struck. The aim of our social security policy is to produce help where it is needed. The housing benefit system, as it has developed, does not achieve that aim effectively. It is cumbersome, inefficient—

Mr. Field: It is the Conservative party's scheme.

Mr. Whitney: Yes, it is our scheme, and we are improving it. The existing scheme was an improvement on what went before. It appears that the hon. Member for Derby, South hankers after what went before.

Mr. D. Campbell-Savours: When the Minister says that the Government are improving the scheme, does he mean that it is acceptable to reduce the numbers of claimants of housing benefit by 400,000 in 1983, 500,000 in 1984, and a further 500,000 in 1985? Is that what he means by improving the system?

Mr. Whitby: We mean precisely what I have said. If it is necessary, I shall repeat what we mean for the third time. We must ensure that the large sums that we are spending in the social security programme as a whole, and certainly on housing benefit, are carefully directed. Even with the change announced 10 days ago by my right hon. Friend, we are talking of a benefit which goes to more than one household in three—to more than 7 million people. If the hon. Gentleman wishes to spread the jam more thinly and higher up the income scale, I should be interested to see his figures, as, I am sure, would the voters.

Mr. Gordon Brown: rose—

Mr. Whitney: I have already given way to the hon. Gentleman, and I must make progress.
Therefore, we seek to make improvements in the scheme. We recognise that while it has had successes, it needs improvement, as the examination of the housing benefit review demonstrated. The system is not at all well understood and it is definitely difficult to administer. Therefore, we must seek to reduce the case load and to control expenditure. The November uprating was a step along that road. The hon. Member for Derby, South claimed that this pre-empted the Green Paper proposals. It did nothing of the sort. It was a reform and an improvement which was needed. It would be strange if we took steps which were not consistent with the Green Paper proposals.
The change will produce a saving of about £57 million. However, the majority of people will not be affected. Those people on supplementary benefit will not be affected. By November, a pensioner couple with a total income of perhaps £13 above the retirement pension—a total of £74—would lose only 10p a week, taking into account the significant increase in the retirement pension of £4.
The hon. Lady was kind enough, with her customary charity, to pay due credit, albeit a little backhandedly, to the fact that the change in the child's needs allowance in housing benefit is a real increase of 95p and represents a step forward. It is another demonstration of our interest in protecting low—income families with children. It is estimated that about half a million poor families will benefit from that change. We believe that the changes that we have already made in the housing benefit system announced in the uprating statement are sensitive, prudent and fair.
We have never denied that housing benefit expenditure must be reduced and controlled. I cannot go into more detail on the target, because the consultation process is continuing, but it is about £500 million. A proportion of that will be made up by the minimum contribution to rates, which is one of the points that the hon. Lady raised. I must point out that that £500 million represents one sixth of the increase in the cost of housing benefit since 1979.
We have been down the familiar path of figures. The hon. Lady made another sortie or two to test whether she could catch any fish at the end of her line—if I may mix my metaphors. I must repeat that it is essential to have an agreement on the structure. Everyone, even the Opposition, understands that there is a need to change the structure of the housing benefit system. It makes sense to have a national debate on the subject.

Mr. Gordon Brown: The Minister suggested that the debate should be about philosophy, not about facts and figures. He also suggested that the aim of housing benefit reform is to target benefit to those most in need. How does targeting help those most in need if an unemployed person on £28 a week, who may be deprived of single benefit, must now pay £2 or £2·50 a week for his rates bill? How is it targeting on those in need to ask a pensioner on £35·80 a week, who may also lose heating additions and other benefits, to pay £2 or even £3 towards a rates bill? How is the principle of targeting to be achieved when the Minister proposes that, no matter how poor a person is, he must pay 20 per cent. of his rates?

Mr. Whitney: That is the last time that I shall give way to the hon. Gentleman. The document from which he was reading is the one that was leaked to him before the final


version was drafted, and he clings desperately to that and to his illusions. As always, he tries to insert figures where there are none. The hon. Gentleman will understand later how misguided he is.
It must make sense to conduct a sensible debate about the structure of a phenomenon as complicated as the housing benefit scheme and its relations with other benefits without, at this stage, getting to the figures. We must discuss the merits of basing housing benefit assessments on the new income support rates. Of course, the rates will not be announced until 1987. Therefore, we must get the structure right first.

Mr. Jim Craigen: I have read the final version of the report. At present, the rates and housing benefit relief of many council tenants in Scotland is dealt with by the same authority. Did the Government calculate how much it would cost to set up a separate department dealing exclusively with rates relief?

Mr. Whitney: One benefit of the new structure is its simplicity. We shall soon begin to discuss with the local authorities the administration of the new structure, and I am sure that the result will be a scheme which is easier to operate not only for claimants but for local authorities.

Mr. Craigen: rose—

Mr. Whitney: I will not give way again, because other hon. Members wish to speak in this short debate.
Other elements in our proposals are, of course, subject to developments in other areas. For example, as the hon. Member for Dunfermline, East (Mr. Brown) suggested, we have proposed a 20 per cent. minimum contribution to rates. However, that will depend upon the outcome of the review of local government finance being undertaken by my right hon. Friend the Secretary of State for the Environment. We must re-establish the link between the local residents and local services. We should take account of the fact that 3 million households pay no rates and that our proposed changes would insulate them further. We are convinced that it is right to make local authorities more accountable to their ratepayers and to strengthen the link between ratepayers and services.
The Government recognise the anxiety about the impact of the changes, but we shall certainly consider them with great sensitivity. We have already shown great sensitivity in all the changes that we have made since 1979. However, we are convinced that we need a scheme that is simpler, easier to explain and more equitable. For example, the single taper will be greatly welcomed, and the system of using net incomes and the parallel with the income support arrangements will be of great benefit. They will tackle the poverty and unemployment traps and produce the important effect that the support available will be the same for those in work as it is for those out of work.
The Government's housing record is good. Our proposals for housing benefit reform will be of great advantage to the country and to the economy and to those at the lower end of the incomes scale.
I invite the House to accept our amendment.

Mr. John Cartwright: The one thing that the Minister said which should unite both sides of the House is that the complexity and incomprehensibility of the housing benefit scheme desperately needs simplification. We have a system which is impossible for ordinary

people to understand, which makes it impossible for anyone to calculate his entitlement unless he has a computer. It is a scheme in which papers are passed backwards and forwards between DHSS offices and local authority housing departments, which between them seem able to create a bureaucratic jungle which is impossible for the average person to penetrate. There are delays in calculating benefit and in notifying alterations, which means that tenants suddenly discover themselves substantially in arrears.
I ask the Minister to consider the reaction of an old person, for example, who has always taken pride in the fact that he or she has always had a clear rent account—never owed a penny piece—and who is suddenly faced with substantial rent arrears as a result of the operation of a system which he or she does not understand.
There are many such cases. I shall quote one that came to my notice yesterday. A 76-year-old widow in my constituency suddenly received a letter from the local authority saying that her housing benefit should have been withdrawn on 3 December 1984 and that as a result there had been an overpayment of £494·98. She was also told that henceforward she would be responsible for paying her own rent in full. That was a computerised letter, sent by the London borough of Greenwich. Someone in the department clearly felt unhappy about it, however, because there was a handwritten note which said:
Do not worry about this letter. Please complete an application for standard housing benefit.
She did that, and as a result she now receives standard housing benefit, the arrears have been wiped off and she is £17 in hand.
This lady does not begin to understand how that has been worked out. She has a page of calculations on the back of the second notification letter which runs to 26 lines of figures explaining her entitlement. She has a daughter who could help her, but we all know of people who have no one to help them and who cannot begin to understand the complexities of such a system. It is extremely frightening for old people suddenly to receive such letters out of the blue. I am sure that the Minister recognises the difficulty.
A simplification of the system is essential. What worries me and, I think, other Opposition Members is that the Government seem to be mixing simplification with the cutting of benefits. That is something that we find much less attractive. For example, a case can be made for the introduction of the single taper, which withdraws housing benefit, combining the rent and the rate elements in one assessment.
The review team which recommended that also sounded a warning about it. It pointed out that the practical effect of such an approach would be to the disadvantage of owner—occupiers, since home owners are eligible for help only with their rates. They would, as a result, be counted as having low housing costs under a combined assessment and their housing assistance would therefore be withdrawn more quickly than now, and more owner—occupiers would cease to receive any help.
The review team made a clear recommendation. It said:
In our view, in a combined assessment eligible housing costs should be extended to include some element of mortgage interest, to balance out the eligible costs of owner—occupiers and tenants.
In other words, the review team was calling for an approach to owner-occupiers similar to that of tenants.
It is a matter of regret that in the Green Paper the Government seem to have rejected that approach. As a result, what they suggest in the Green Paper will have a harsh impact on home owners who receive assistance only towards their rates. Their benefit will be withdrawn, as the review team warned, at a much steeper rate under a combined taper than it would have been under the separate rate taper.
As has already been suggested, the main losers under such an approach are likely to be owner—occupiers whose incomes are just above supplementary benefit level. Most of them are likely to be pensioners with small occupational pensions, people who own their own homes, whose only assistance from the state is help with their rates. They are the thrifty, prudent people who made provision for their retirement — the type of people about whom the Government say they are worried. However, it seems to be those thrifty, prudent people who will be in the firing line as a result of the proposed changes. That is unnecessary. The Government could have accepted the review team's recommendations and could have treated mortgage interest on the same basis as rent.
If the Government had combined that with a sensible reform of rates and the introduction of a practical local income tax it would have been a much fairer way to treat people than they are now suggesting.
In the review, we see a Government determined to dress up a cost—cutting exercise as a radical reform. The Government are, as we have heard, seeking housing benefit cuts to a target figure of £500 million. The November uprating seems to be the first phase in those cuts. As other hon. Members have said, with the November cuts we are talking about 2 million households suffering a cut in housing benefit and about 500,000 households losing benefit altogether. That follows two years during which a similar policy has been operated. In April 1983, for example, about 2·25 million households suffered losses in housing benefit and 400,000 households lost benefit altogether. That was a package which saved the Government about £50 million. In April 1984, about 2 million households again suffered losses in their benefit and 500,000 households lost benefit altogether. That package saved the Government £215 million.
What that means to people struggling to balance their weekly budget is underlined by something the Government's Social Security Advisory Committee said in its comments on the 1984 housing benefit cuts. The report was produced in February 1984. The SSAC said:
It is clear that, for many people, the loss of income will be very severe … We join with all those who gave evidence to us in deploring the reduction, which we believe will have an unduly harsh effect on many individuals.
The committee concluded:
It seems extraordinary that so much money should now be taken out of housing benefit within so short a time.
That might have been extraordinary, but the Government's current proposals show that it is a policy that is continuing. However, the Government say—the Minister implied much the same tonight—that there are no cuts because they have increased the amount of money available for housing benefit. I notice that the Secretary of State made just that point on 3 June, when he said:
housing benefit expenditure has increased from £1·2 billion in 1979 to £4·2 billion in 1985–86."—[Official Report, 3 June 1985; Vol. 80, c. 45.]

The Policy Studies Institute has examined those claims and has clearly proved that the figures do not reveal the whole story. It points out that the apparent rise in the amount paid in housing benefit is what it calls "entirely artificial". It said:
of the£3·1 billion increase since 1981–82 (at 1984–85 prices), £2·7 billion is simply the book-keeping transfer of supplementary benefit cases; the other £0·4 billion provided a modicum of protection to the poor against a £1·7 billion fall in council housing subsidies.
What the Government claim is an increase in overall support for housing costs is clearly a cut. Those Opposition Members who point to cuts are plainly proved right by such an analysis.
I am pleased that the Government now realise that with the present housing benefit scheme they have created an insensitive, bureaucratic monster. Some of the reforms which the Government suggest are sensible, but I object to the fact that they are trying to cut corners. They are trying to slip through cuts in the guise of reform. Those cuts will have a severe impact on some of the most deserving households. That is why I and my colleagues will vote for the motion tonight.

Mr. Michael Stern: The review that we are discussing today sets four targets in relation to husing benefits — simplification, equalisation, accountability and administrative savings. I am surprised and horrified at the extent to which all those objectives—which should be entirely laudable and welcomed in all parts of the House—have received such scant praise and acknowledgement from the Opposition.
To fill the gap left by the Opposition I intend to say what the Government seek to achieve in connection with housing benefits. The most important aspect of the Green Paper is simplification. A scheme to abolish the complexities and low take—up of housing benefit supplements and replace it as part of a new income support scheme on a more broadly drawn basis can only be administratively simpler, more easily understood and undoubtedly more popular.
The concept of replacing six different tapers, as people move up and down the housing benefit scale, with one taper, can only be welcomed as an exercise in making the scheme more intelligible.
One major advantage in the proposed simplification is that it will remove many complications caused by the present system under which the needs allowance is based on gross income and supplementary benefit on net income. Cuts have been mentioned, but many of the proposed changes will create benefits. For instance, a constituent of mine, a frequent visitor to my surgery, did not believe that it was worth waiting for the Green Paper but now that he has seen it and I have explained it to him he has gone away rather happier.

Mr. Frank Field: I cannot say that about my constituents.

Mr. Stern: My constituent had over many years set aside as much as he could out of a relatively low-paid job to provide a pension for himself. He believed that that pension would be a modest help in his retirement. He retired in the early 1970s thinking that that relatively small pension would help to support him through his retirement. Since then he has lived through the inflation of the Labour


Government and seen his pension dwindle almost to nothing in real terms. Nevertheless, he was very proud of the principle that he had saved to buy himself an additional pension, no matter how small. Under the existing housing benefit scheme, because with his state pension and his works pension he was earning just enough to pay tax, he found himself suffering a reduction of 100 per cent. in the pension of which he was so proud through a combination of tax and the taper.
As a result of the scheme now proposed, which will be based on net rather than gross income, I have been able to tell my constituent that all his efforts were not totally worthless and that although he will not keep much of his pension as a result of the changes he will at least keep some of it.

Mr. Field: I would not want the hon. Gentleman to mislead his constituent, who may be listening to this debate. How can the hon. Gentleman give that assurance, when we do not have the figures necessary to know the nature of the scheme?

Mr. Stern: My constituent has read about the 70 per cent. taper and drawn conclusions from that. I accept that there is no absolute assurance but at least he now has some idea of what is to happen.
The need for simplification of housing benefit is clear. People on supplementary benefit are treated more favourably than people with low incomes and almost identical resources. That is clearly unfair and needs correction. Help with rates goes further up the income scale than help with rent. That, too, is illogical and needs simplification. Moreover, no one who handles constituency cases can seriously suggest that the complexities of the present system are capable of explanation to anyone who has not made a detailed study of the subject.

Mr. Field: The hon. Gentleman presents all this as a major advance in understanding for our constituents and that may be so, although I suspect that many of my constituents will still not have the energy to follow these matters in detail, but is not another advantage of simplification the possibility that the staff running the scheme will understand it when previously they did not?

Mr. Stern: Yes, I had intended to refer to that.
With regard to equalisation, it is surely right that people with similar needs and circumstances should have similar benefits whether they are in or out of work. At present, certificated cases — those on supplementary benefit—have 100 per cent. of their rent paid. Standard cases—those in work or with some kind of income—receive 60 per cent. benefit which is tapered up or down on one of six tapers and may also attract housing benefit supplement. Equalisation was clearly needed and that is what has been offered.
The third advantage is accountability. There are many different views about the desirability of the domestic rating system, but most people agree that one of its major faults is that far too few people pay rates. This makes swingeing rate increases such as the 55 per cent. increase promised for next year by Avon county council even more painful to people at all points on the income scale. The Government's proposal to increase the number of people who pay rates will inevitably be to the advantage of the rating system and of accountability by local government and may even make spendthrift councils such as Avon pay

more attention to the views of the people whom they claim to represent, because they will be attacking far more of their constituents when they increase the rates. A proposal which means that an additional 7·5 million households—one household in three—will have to take note of rate increases is clearly an advantage in terms of accountability.

Mrs. Beckett: How does the hon. Gentleman square the comments in the review about the need for 100 per cent. of housing costs to be returned to people in the lowest income brackets with the advantages that he claims will accrue to them from paying rates? How does he square the enthusiasm of some Conservatives for targeting help on the poorest people with his view that it will be an advantage to those people to have to pay sums that they do not now pay?

Mr. Stern: I see many advantages for the whole of society, and certainly for the poorest members of society if, as a result of the increased accountability that the new scheme will bring, more and more people realise the extent to which their environment is being impoverished by spendthrift councils. That advantage will extend to all who inhabit areas in which spending comes first and value a long way behind.

Mr. Gordon Brown: Will the hon. Gentleman give way?

Mr. Stern: I have given way several times and many other Members wish to speak. I hope that the hon. Gentleman will forgive me if I do not give way again.
I turn to the administrative savings that will result from the Green Paper's proposals. The existing arrangements have been widely criticised by the Public Accounts Committee. Any system that is unintelligible but which involves 8,500 local staff costing £117 million is not immune from criticism. The Green Paper's proposals will enable local authorities to save money which can then be used either for other forms of spending or for rate reductions. On those four grounds, I commend the Green Paper's proposals.

Mr. Peter Pike: The speeches in the debate on child benefit and the speech of the Under-Secretary of State for Health and Social Security in this debate have convinced me that the Government intend to axe the welfare state, not to reform it. The purpose of the exercise is to make major public expenditure cuts. The Government are wrong not to give the figures.
The Under-Secretary of State said that the annual cost of the social security budget is £42 billion. I believe that the Government intend considerably to reduce that figure. They are not prepared, however, to say what their target is because they wish to avoid a major outcry at this stage. The public will not be conned by the Government's actions. The figures will be made known when the legislation is introduced. Unless they change their mind before that stage is reached, people will then know exactly what the Government intend to do. The reviews will be the greatest single reason for the Government's defeat at the next General Election.
The only figure we have been given is a cut of £500 million in housing benefit. This will result in 7·2 million households losing benefit. It means that one third of households will lose benefit. Four million of the 7·2


million householders are pensioners. And 1·8 million householders will probably lose all of their housing benefit, of whom 1·2 million are pensioners.
Housing benefit is to be made available to those, both in and out of work, who receive the level of income set for income support. That may seem to be fair and reasonable. However, such a policy subsidises low wages and is consistent with the Government's policy of abolishing wages councils. The Government believe that the solution to unemployment is to reduce wages. I have yet to see reduced pay resulting in the safeguarding of jobs and the avoidance of redundancies.

Mr. Whitney: Is the hon. Gentleman opposing the family credit scheme?

Mr. Pike: No, I am not opposing it, but I do not believe that it is the right solution. Nevertheless, if it is the only solution on offer, we have to accept it. We ought to ensure that every worker is given a reasonable wage with which to support his wife and family. Family income supplement is wrong. Its replacement is also wrong. Supplements of that kind mean that employers are subsidised. As income increases over the base that is to be set, people will be hit very hard by the sharp reduction in income supplement. Although the Government have not said what the taper will be under the new scheme, if the tapers that are used in the example in the Green Paper are put into effect the poverty trap will be made even worse. For those paying tax and national insurance and receiving a rent and rate rebate, the marginal rate of tax has already increased significantly since housing benefit replaced the previous rebate-allowance scheme. The marginal rate of tax of working households receiving housing benefit in March 1983 was 61·75 per cent.; in April 1983, 67 per cent.; in April 1984, 74 per cent.; and in November 1984, 77 per cent. The rate of withdrawal of benefit foreshadowed in the Green Paper, of 70p. of net income, would mean a marginal tax rate for working households receiving housing benefit of 82 per cent. at current levels of tax and national insurance rates. This will make it even more difficult for low wage earners to improve their standard of living by working overtime and earning extra money.
Furthermore, capital will be taken into account. Those with capital of over £6,000 will be barred from housing benefit. Those with capital of over £3,000 will lose benefit of 40p for every £100 of capital between £3,000 and £6,000. These further blows have to be considered on top of the other attacks on housing by the Government. The insufficient HIP allocations mean that housing conditions will be made worse. It will not be possible either to build or to improve houses in both the public and the private sectors.
Since this Government were elected, the support available to the housing revenue account has been considerably reduced. The last figure fixed in 1979 by the outgoing Labour Government in my borough was £1·6 million for 8,000 houses. For each of the last four years it has been zero, zero, zero and zero. It does not take a mathematician to work out what that means for people's rents. The Government forced up rents. Although they say that they want people to have a choice, they have eliminated for many people the choice of living in rented council accommodation.
Over 15,000 households in Burnley receive some form of housing benefit. Nearly three quarters of council house tenants receive some form of housing benefit. An additional burden will be placed upon local government because of the central Government reduction of subsidy from 90 to 80 per cent. The Government do not intend to increase the grants paid to local councils. It would be a nonsense for the Government to transfer grants from one heading to another. This means that the additional 10 per cent. burden to meet housing benefit will be passed on to council tenants in the form of rent and to ratepayers as a whole. A further burden will be thrown on local authorities. Rate capping will also throw an additional heavy burden on local government. Local government will have to bear an additional burden of 10 per cent.
It is wrong that mortgage interest payments should no longer be eligible for consideration in the assessment of housing costs. The Government claim to be the friend of owner—occupiers, yet they intend to hit those whom they claim to be their greatest allies. It is a bad policy.
I do not accept the proposal that everybody should bear 20 per cent. of the rate burden. The inference is that unless householders pay something towards the rates they should have no say in local Government elections. The Government infer that because people may pay no rates they vote irresponsibly. What nonsense. The reverse suggestion might be that if they do not pay rates they should lose their local election vote, and if people do not pay taxes they should lose their parliamentary vote. Their motto at the next election could well be, "No representation without taxation."
The independent review team recommended 100 per cent. help with housing costs for those on the lowest incomes as
the only fair way of meeting their needs within the present vagaries of the housing market".
While the Government have accepted that argument for rent, they have not done so for rates. The Green Paper states:
The Government are firmly of the view that should domestic rates continue to be a significant element of local authority revenue then all households should make a contribution towards them.
I have already said that I cannot accept the logic of that argument.
The Government have suggested that claimants should meet at least 20 per cent. of their rates, although this could be revised. One assumes that, under a Conservative Government, a revision would be an increase rather than a decrease. This is a foot in the door, and it will put a further burden on the people. The hon. Member for Woolwich (Mr. Cartwright) has referred to the kind of people who will be hit.
The consequences for claimants on income support of having to meet 20 per cent. of their rates could be considerable. Disturbingly, there is no indication in the Green Paper as to whether the loss to claimants of 20 per cent. of their rates benefit will be compensated for by an equivalent increase in the income support scales. At best this could be done only on a rough justice average basis which would involve an increase of around £1 a week to the income support scheme, equivalent to 20 per cent. of the average rate bill. Again, it would be absolute nonsense to assume that the Government will consider this, as that would merely transfer the figure from one heading to


another. In my opinion, this exercise is designed to save money. Unless the Government say that they intend to do this, one assumes that they will not do so.
The consequence would inevitably be to generate increased debt problems. The absence of any pledge even to make this average compensating adjustment is particularly worrying, and I do not believe that the Government will be prepared to say that they will do that, given that their objective is to save money rather than to simplify the system.
It is clearly inappropriate and unrealistic to expect people on income support to find sufficient money to meet 20 per cent. of their rates bills without extra assistance. The Minister failed to answer the forceful and pertinent points raised by my hon. Friend the Member for Dunfermline, East (Mr. Brown), and I hope that he will answer them when he replies to the debate.
No figures are given in the Green Paper of the saving that would be made by the DHSS if the 20 per cent. were not compensated for, but it seems likely that it could be of the order of £250 million.
Making income support recipients pay at least 20 per cent. of their rates would turn on its head one of the key arguments used by the DHSS to persuade local authorities to agree to the introduction of the housing benefit scheme in 1982–83—that by rebating claimants' rent and rates at source, local authorities would greatly reduce the rent and rate collection tasks as well as the arrears problem. That problem will now be reintroduced in respect of 20 per cent. of the rates for every ratepayer. Approximately 2·5 million households that now have their rates fully rebated at source will, under this proposal, have to resume payments. The administrative costs for authorities and the potential for increased arrears should not be underestimated.
The attack on housing contained in this part of the reviews shows that this is not a caring or compassionate Government. They intend to make the poorest and most deprived areas of the country pay the penalty. They will give tax hand-outs to the rich and wealthy at the expense of the poor and the poorer regions.

Mr. Martin M. Brandon-Bravo: There are three key elements in the Opposition's motion. First, as critics of the principle of housing benefit, they cite the administrative problems, which undoubtedly are still in the system, as a condemnation of the principle of housing benefit. I take this opportunity to pay tribute to the city officers of Nottingham, who in that first year dealt with 55,000 certificated and standard cases. Secondly, they claim that pensioners and poor families are deprived of help. That may be a subjective opinion, but it is certainly not truthful. Thirdly, the motion pours scorn on the social security review and, in my view, assumes that such a review must of necessity bring greater poverty.
Those three elements illustrate beyond doubt the Opposition's unwillingness to face facts, as well as the very synthetic nature of their concern.
On the first point, there has been no mention of the justice of bringing in a new scheme to replace the tangle of the old one prior to housing benefit. No mention has been made of the fact that, in order to be as even—handed as possible in an undoubtedly major reorganisation, housing benefit supplement — the real complicating factor—was provided. There is no recognition of the

fact that had the Government gone for total simplicity and ignored losers there might not have been any of the administrative chaos to which the motion refers. Perhaps the Opposition wish the Government to put simplicity before fairness. If so, it is a very strange brand of new Socialism.
I wish to touch on one of the least mentioned reasons for the original change, which also added to the administrative difficulties. Sadly, it is still in the system. I refer to what in euphemistic jargon is called financial flexibility. That actually meant that one could do what one liked with the money that one was given to pay the rent—booze or make whoopee if one wished—and that other tenants would, through higher rents, pay the bad debts that had to be written off by local authorities.
Expenditure on housing support, which has risen from £1·4 billion in 1979–80 to £4·2 billion in 1984–85—and a budget of £4·5 billion next year—cannot remotely be described as depriving the pensioner or the poor. No one could describe that gradation as a cut. I understand the impact of unemployment on those figures, and there is no comfort or pleasure in those human statistics, but to accuse the Government of not meeting the social cost of this problem on behalf of the community at large is the ultimate humbug.
While we are talking telephone numbers, my understanding — I am sure that my hon. Friend the Minister will correct me if I am wrong — is that spending under the review is likely to rise from £40 billion to £42 billion. When I went to school—

Mr. Gordon Brown: Does the hon. Gentleman not accept, as I think the Minister will confirm, that the object of the housing benefit proposal is to save £500 million? On top of that, money is to be saved from the child benefit budget, and almost certainly from the supplementary benefit budget. There are savings as a result of the review. The suggestion made a year ago that this was a nil-cost review has been totally undermined by the various announcements made by the Government. Why did the housing benefit review recommend no change or cuts in housing benefit? Why did it not recommend that the poor pay 20 per cent. of their rates entitlement? Why have these proposals been totally undermined by the decisions of the Cabinet and Ministers?

Mr. Brandon-Bravo: The hon. Gentleman abuses the courtesies of this House, because on two or three occasions he has sought to intervene in every speech. All that we have had is a catalogue of the minuses. We are saying in the broad approach to this matter, yes, there have to be losers and there have to be minuses. I have said that in the totality of spending we have gone from £40 million to £42 million, and I am sure that I shall be corrected if I am wrong. The hon. Member for Dunfermline, East (Mr. Brown) is shaking his head. When I went to school I thought that that was an increase, but, standards being what they are these days, I suppose that that now has to be pronounced a cut. In Socialist jargon, any spending that is less than what Labour promises—with the honourable exception of what the hon. Member for Birkenhead (Mr. Field) said this evening—becomes a cut.
The sad part of all this is that so many people are beginning to swallow that humbug. First, there is the opposition to the review in general. After 40 years, what reasonable person would not say, "And about time too."?


When there is such a tangle of interrelated allowances, benefits, discards and adjustments, it is insulting the intelligence to say that it could all be straightened out with nobody being the loser. Indeed, natural justice demands that where benefit is going where it should not go, the recipients should lose. Midas himself would not have the resources so to increase the level of all benefits—this applies as much to housing benefit as to any other sphere—that no one tends to end up with less than before. But even if that were done, I am certain that Opposition Members would leap to their feet and claim that, because some people had more than others that, too, would be wrong. Nothing, but nothing, would satisfy the Opposition.
Losers might indeed arise, if, for example, we consider student support. Few people outside the House realise that, in addition to grant and or parental support, housing benefit may be paid. Losers might prefer it if we try to simplify the speed or frequency with which benefits change with changed personal circumstances. Losers would probably arise simply in the consideration of minimum payments.
There is one group of losers whom I should not be sorry to see lose. They were highlighted in the report, and I might refer to them as the free-loading up-marketeers. So long as some recipents — I stress some — of housing benefit are satisfied that there is no limit to what they can get, they will stick out for a house of the size and quality and in the precise place that they want to be until, in the end, a housing officer grants them that property. I am sure that all of us with council estates in our constituencies know of people who will continue to refuse until they get the house that they want.
The hon. Member for Derby, South (Mrs. Beckett), who opened the debate for the Opposition, is gazing at me as if to imply that that does not happen. If that is so, I do not know where the hon. Lady has been when dealing with housing, because this is a matter which gets up the noses of most honest straightforward tenants who regard themselves as playing by the rules, and they are irritated, and rightly so, by those who abuse what ought to be a reasonable and fair system.
I deal next with the non-dependant reductions, which, as the review body rightly points out, ought to be called non-dependant contributions. I agree entirely with the view of the review body. This should remain in the calculations on the basis that those who are sharing a household should contribute to it, or at least be assumed to be contributing to it, if they have the income to do so.
I join my hon. Friends in welcoming the sound approach of the recent uprating. We should underline the point that, contrary to what is stated in the Opposition motion, a pensioner couple will need to have an income of nearly £700 a year over the retirement pension level before housing is reduced by even lop per week. As the review body made clear, there are bound to be difficult judgments on how to provide assistance in a fair and equitable manner within the limits of public expenditure. There are limits, and it is nonsense to suppose otherwise. It is dishonest politics to tell people that there are no limits.
The review body went on to point out—this refers to the last part of the Opposition motion—that the review

should not be allowed to stand in the way of the basic reforms necessary to achieve a similar and equitable system.

Mrs. Beckett: The hon. Gentleman referred to dishonesty. Does he agree that it is a little dishonest to quote the review body without acknowledging that it did not propose cuts in housing benefit, whereas the Government are proposing cuts of £500 million and then casually saying, "Mind you, there have to be changes in priorities."?

Mr. Brandon-Bravo: I do not think that I could be accused of having made selective quotations or of being dishonest, unless the hon. Lady wishes me to read out the whole document to prove that I have read it, or am I misunderstanding her point?

Mrs. Beckett: I think that the hon. Gentleman has not understood. I accept that the hon. Gentleman does not make selective quotations. My point is that the review body, which he chooses to quote as stating what should be a fair system—of course choices have to be made—did not propose any cuts in the overall cost of housing benefit. In my view, it is a little dodgy to use the words of the review body report about changes in the system which do not imply overall cuts to justify what the Government are doing, which is to make cuts of £500 million.

Mr. Brandon-Bravo: If I appear to have been suggesting that the review body stated that we should reduce benefit by £500 million, of course I apologise. The hon. Lady is correct. That was not the task of the review body. That is the task of the Government and of politicians. Their task is to consider the report of the independent review body and to decide what is good in it and with what they agree or disagree, and to establish whether those recommendations can be fitted into the totality of what can be spent in the public sector. This would apply whether the hon. Lady was speaking from the Opposition Dispatch Box or from the Government Dispatch Box. The hon. Lady will be in the same position of examining the report and saying, "What can I take out of it that I agree with, what do I disagree with, and how much can we afford?"
There is always a limit to public expenditure, whichever party is in government. The Government seem to be going about it in the right way, and they have my complete support.

Mr. Frank Haynes: I have listened to most debates on the review, and in the matter of housing benefit, I am convinced that there has been a con trick by the Government. The Minister talks about simplification. It will be worse later than it is now. I do not know how many surgeries the Minister has, or the Secretary of State, for that matter.

Mr. Whitney: One a week.

Mr. Haynes: I hold surgeries regularly to meet constituents about their problems.

Mr. Whitney: So do I.

Mr. Haynes: I mean those I hold to discuss housing benefit when constituents have lost it. Is the Minister going to say that he has those as well?

Mr. Whitney: I am certain that all our constituents will welcome the simplicity which will be built into the new system, and they will then understand it.

Mr. Haynes: I did not ask the Minister that question. I asked whether he had constituents enjoying housing benefit who have now had it taken away. That is the kind of constituent who comes to my surgery with a problem. I am asking the Minister whether any of the electors come to him and complain about losing housing benefit. I notice that he is not coming back to the Dispatch Box. He knows full well that those people come to see him, but he is not saying anything because the Government robbed the people last year, never mind what they will do in the future.

Mr. Whitney: The hon. Gentleman seems to want to tempt me, and I am happy to be tempted up to a point. We all have constituents who enjoy housing benefit. In 1979, 5·5 million people enjoyed housing benefit; now, there are 7·5 million. That is the arithmetic.

Mr. Haynes: The hon. Gentleman has dodged it again. I am talking about his constituency, not about the national level. I am asking him specifically about his constituency and the people he represents. It is obvious that he is not going to say that his constituents have complained that their housing benefit has been taken away because of the Government's policies. The hon. Gentleman is not going to admit that. If he does not give us the answer, he is not being really honest.

Mr. James Hamilton: Does my hon. Friend recognise that the Under-Secretary of State has said that in 1979 5·5 million people received housing benefit and that the figure is now 7·5 million? Is that not because of Tory policy, the large number of unemployed and the low wages that are being paid?

Mr. Whitney: I am happy to point out that the whole of our social security benefit system, including housing benefit, has kept well ahead of the drain involved in the sad unemployment figures. That unemployment is the reason why we must keep public spending under control. If we trod the road down which the Opposition are tempting us, we would spend billions and billions of pounds and unemployment would double and treble. That is the point that the Opposition must grasp.

Mr. Haynes: The hon. Gentleman really is naughty. I have not yet made any suggestions. I have only asked him a question, and he has not answered it. Good grief, that is the limit.
Let us look at the cold facts. I have heard the Prime Minister and other Ministers at the Dispatch Box pour out compassion, but there has not been an ounce of real compassion from the Government. I know that the hon. Member for Nottingham, South (Mr. Brandon-Bravo) is a member of Nottingham city council. When he made his contribution, all his thinking concerned finance. He was not thinking about the problems created for the people who will be totally dependent upon these benefits. That is why I say that this is a con trick. Ministers are constantly asked for figures, but they talk only about structure. We were given only one or two figures.
When my hon. Friend the Member for Dunfermline, East (Mr. Brown) put his questions, the Minister did not want to respond, because he knew full well that my hon. Friend had all the answers. My hon. Friend knows what

will happen with social security from A to Z, right through the benefit schemes, and he knows what the Government want to do.
I remember what happened when the right hon. Member for Daventry (Mr. Prentice) was the Minister with responsibility for the disabled. History is now being repeated. The Opposition were moaning and groaning as we do constantly, about unemployment. The right hon. Gentleman set up a scheme with one thousand storm troopers to find out where he could rob the disabled. [HON MEMBERS: "No."] Government Members have bad memories. The hon. Member for Derbyshire, South (Mrs. Currie) was not a Member then and did not hear what was said. I assure her that that programme was implemented. The Government are again robbing the poor people to feed the rich.
I well remember the last time a massive decrease in income tax was given to the rich. When the Prime Minister was asked what would happen, she said, "The money that they get back will be invested in industry. It will create jobs, and will get the nation back to work." It did not do that. The restrictions were lifted, and all the money flowed out of the country.
The same thing will happen with SERPS. Unless the Government back off from their proposal, the insurance companies will invest their money abroad, just as they do now. This will affect the working-class people who contribute to SERPS. The Government will push money overseas, instead of investing it in Britain.

Mr. Brandon-Bravo: Like all his colleagues, the hon. Gentleman makes constant references to handouts to the rich. Does he want us to return to the days before the top tax rate was more than 60 per cent., back to those confiscatory levels that created the brain drain?

Mr. Haynes: Talk about the brain drain. Pop stars? Are those the people to whom we want to give back all the money? There are thousands of them. That is not work. I have worked in the pits; I know what work is. I contributed to SERPS. But we are talking not about that scheme but about housing benefit.

Mr. Brandon-Bravo: The hon. Gentleman made that point.

Mr. Haynes: The hon. Member for Nottingham, South (Mr. Brandon-Bravo) intervened in response to my point. I raised that matter only in passing, but he extended it. Let us consider fairness. Members of Parliament obtain relief for a second home, yet we are talking about taking the benefit from those who desperately need it.

Mrs. Edwina Currie: Rubbish.

Mr. Haynes: The hon. Lady is half asleep. If she does not know about the entitlements of Members of Parliament, she should go the Fees Office and find out.

Mrs. Currie: Will the hon. Gentleman give way?

Mr. Haynes: I shall not give way. The hon. Lady should go to the Fees Office and clarify what I have just said.

Mrs. Currie: Will the hon. Gentleman give way?

Mr. Haynes: It is in Hansard. The hon. Lady can go to the Fees Office and find out: about those entitlements. Hon. Members have the right to claim relief on a second home, and are doing so. Conservative Members applied


pressure to bring about those benefits. That is how fair they are. They are looking after themselves as well as the rich.

Mrs. Currie: For his own sake, will the hon. Gentleman give way?

Mr. Haynes: I shall not give way.

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member for Ashfield (Mr. Haynes) is not giving way. The hon. Member for Derbyshire, South (Mrs. Currie) must resume her seat.

Mrs. Currie: I am grateful to the hon. Gentleman for giving way.

Mr. Haynes: I am not giving way.

Mr. Deputy Speaker: The hon. Member clearly is not giving way. The hon. Lady must resume her seat.

Mrs. Currie: I am grateful to the hon. Gentleman.

Mr. Haynes: I am not giving way. I respect the Chair. When Mr. Deputy Speaker is speaking, we sit down.
It is a continuous shackling that is going on. The Government are going to shackle the people in the very low income groups so that they cannot have the benefits that we say they are entitled to. It all lines up with this Government's policy of shackling the trade unions.
If the Government do not back off from this scheme, it will burden the local authorities. The staff of Nottingham city council will be burdened with more work. When the housing benefit scheme was transferred from the DHSS to the local authorities, it was made clear to the authorities that they must not take on any more staff. Here is more work coming their way, and if this proposal comes into operation, I shall be interested to see how the local authority staff react. It will mean more work for less money for them.
Conservative Members have come up with excuses about complications, and saying that the structure must come first and that figures are necessary. Some of us have attended meetings and tried to explain what the Government are doing.
Recently in the Nottinghamshire county council points have been raised about unfairness and the allowances that the police get — massive rent allowances and free prescriptions. The Government put the cost of prescriptions up to £2 not long ago, but the police get free prescriptions, free spectacles, free dentistry. What is going on is totally unfair. If hon. Members want to understand about fairness, they should listen to some of the contributions made from the Opposition Benches. The people who can afford to pay should be paying and the people in the lower income groups should not have to pay what they can ill afford for what they need.
In this review the Government, I maintain, are conning the public, but they will not get away with it. Slowly but surely the people are waking up to what is going on. The Government will force local authorities to implement these proposals and no doubt they will watch very carefully to see how many people the authorities take on to do the job. These proposals show quite clearly where the Government are going as far as the lower paid people of this nation are concerned. I think that after next Thursday the Government will get the message, because, make no

mistake, when we get the opportunity we will put all these wrongs right and the rich will have to make their contribution, because they are not making it at present.

Mr. Timothy Wood: I have listened with interest to some of the criticisms of the Government action on housing benefit, but I must confess that I find many of the criticisms of the proposed changes, whether in the uprating or in the social security benefits review, misguided. I know that the present system of housing benefit was introduced by this Conservative Government, but I and many of my colleagues have been highly critical of some of its complexities. We have believed it to be in some respects illogical.
I believe that the variations in taper that apply at the moment are extremely difficult for people to understand. The variation concerning a lower taper in terms of rates compared with rents is rather absurd. Therefore, a change that will gradually move away from the present position to what I hope will be, after consideration of the Green Paper and further consideration of the White Paper and the eventual legislation, a common taper, will be a much better, more comprehensible and fairer system in terms of those receiving housing benefit.
The move that has been made to alter the taper and rates will minimise the impact of any change in one year, so avoiding those most in need being grossly adversely affected. As the Minister pointed out, old-age pensioners receiving £10 or £13 above the basic pension will find their housing benefit position changed only negligibly because of the taper alteration. I applaud the decision to proceed in that way.
It seems absurd that of the 7 million people who are covered by that benefit, a substantial number are paying income tax, some at a significant level. The changes in housing benefit—the alterations being made now and the changes that will result from the discussions on the Green Paper—will create a more satisfactory system.
Some extraordinary scare stories have circulated about the likely results of the various reviews into benefits and the legislation that may flow from those reviews. I have made some calculations, taking into account the rates of family credit, housing benefit and changes that are proposed in the social security system.
In view of the way in which the family credit system may be based on net income — after which housing benefit will apply, on the basis of net income also, taking family credit and other benefits into account—we may. find that housing benefit payments fall considerably for large families simply because the family credit that will be paid in those cases will be substantially increased.
In other words, because of some interesting interplays among the various benefits, we are likely to find that one aspect of the system shows a significant saving, although the people who will be benefited or disbenefited, as the case may be, will have their needs met.
The present combination of benefits — FIS, supplementary benefit for unemployed people, housing benefit and so on—acts as a disincentive to people to improve their position at work by doing overtime or undertaking other responsibilities. There is an overwhelming case for making the system simpler and for introducing greater equity, while at the same time maintaining help for those who really need it.
Despite all the Opposition's protestations, the truth is that those who are in most need will be supported as effectively as in the past. That is as it should be. But, equally, there will be an element of incentive for those who can take advantage of opportunities in work and so on to do so. I believe that that, in its turn, will reduce some of the pressures on the present benefit system.
Some of the Opposition's arguments are nonsense. Do they really support what I believe was a mistake when it was introduced, the variations in taper? Do they really think that it is best to have a 9 per cent. taper in rates? Or do not they think that it is more appropriate to have one taper covering all those housing benefits? Surely that is the more straightforward approach—the better approach. If the Opposition believe that that would be a more logical eventual solution to the problems and difficulties of the present system, surely it is equally logical, sensible and reasonable to move in that direction in gradual stages—not in one jump. Legislation may be passed, but it might be possible to make some modest moves in that direction that do not hit any particular group substantially at one time.
In what they have done on housing benefit and the other benefits that interrelate with it, the Government have taken a courageous stand, proposing to make changes that will lead to a more efficient and effective system. As the Opposition frequently tell us, the complexities of the present system, whether in family credit, family income supplement or housing benefit, are such that large numbers of people who may be entitled to them do not claim the benefits. The hon. Member for Ashfield (Mr. Haynes) mentioned people coming to see him at his surgeries. I must confess that many people come to see me at my surgeries about housing benefit. The fact is that in most instances they do not understand the tabulations that they receive. They find them too complicated. They do not understand the picture that is presented in that way. They are desperate for a system that is simpler and more comprehensible so that they will—

Mrs. Beckett: The hon. Gentleman's remarks are of considerable interest. They follow on from remarks in a debate not long ago, which was not on this subject, but on social security. I think that he is falling into the trap that his hon. Friend the Minister for Social Security fell into on that occasion. Of course everybody wants a simpler system, and there is much to be said for having a single taper. However, there is not much to be said for having a single taper that will make things so much worse that people will lose money. I ask the hon. Gentleman to think for a moment whether those who come to his constituency surgeries with justified complaints about the complexity of the system, are brought there by losing money. In my experience, although they may also be concerned about the complexity of the system, they are much more concerned about whether they gain or lose by the changes that are made. As the Minister for Social Security suggested on one occasion that people would prefer a Rolls-Royce system even if it meant less money, does the hon. Gentleman share that delusion?

Mr. Wood: Obviously, those who complain would rather have more money. Nevertheless, adding together the various benefits—family income supplement, housing benefit and so on—it is equally true that if a £1 gain means that one is worse off, one cannot conceivably

defend that system. If changing the system to a more equitable one means that, relatively speaking, some will be a little worse off and some will be better off, I am afraid that that is a change that I accept. One has to go down that path. As some of those who may be marginally worse off may complain loudly, I welcome the courage of the Government in nevertheless pursuing the changes to a more equitable system.

Mrs. Beckett: I do not wish to persecute the hon. Gentleman, but if what the Government are doing will simplify the system, there might be a slight tendency to applause from the Opposition. However, that is not all the Government are doing. In simplifying the system, they are taking £500 million out of it, and that means that there will be hardly any gainers but many losers. That is what makes what they are doing so utterly indefensible.

Mr. Wood: I might accept that general proposition if I did not also take account of the fact that a vast proportion of those so-called beneficiaries of the benefit system are also paying income tax. If one could devise a system, as I believe one can, whereby less benefit may be paid in particular sectors, and at the same time less income tax is paid by the same people, that would be a more sensible and rational system.

Mr. Tony Favell: Does my hon. Friend agree that it is ludicrous that one third of all households, and 50 per cent. in places such as Liverpool, should be taxed and rated to such an extent that they cannot afford to pay their own rent and rates? We must evolve a system whereby people can pay their own housing costs, and the sooner the better.

Mr. Wood: That is right and, as I have said, at the moment we have an absurdly complicated system in which people are receiving housing and other benefits and paying income tax. We need to change that system. The whole nature of the proposed benefit system changes is such that in terms of net income, housing benefit can fall for families with many children, but they will be getting substantial increases through the family credit system, and all to the good.
The savings that may be achievable in the benefits system will provide the possibility of raising tax thresholds, which will mean that those people who may in some circumstances have lost out on benefits will pay less in tax. That is wholly desirable. I cannot understand the Labour party opposing such a principle.

Mr. Boyes: The trouble is that the hon. Gentleman cannot understand anything.

Mr. Wood: I can understand. I look at the figures and I listen to complaints made by the people in my surgery. The changes in the housing benefit system—the moves to a common taper and a more simplified system—will mean that there will be a better take-up for those in need, which will give the opportunity for the raising of tax thresholds so that we do not at the same time have benefits received and taxes paid.
Therefore, overall, instead of the whingeing that we have heard from the Opposition Benches, we should be welcoming the changes, and the fact that gradual modifications are being made in the housing benefit system so that there will not have to be dramatic changes when the social security reviews are completed. We should welcome the move to more effective means to help


those in real need. I am pleased to see the changes this year and I look forward to the further changes coming from the benefits review in the coming years.

Mr. Robert Litherland: I am told that there has today been a conference on this subject in Manchester. It was attended by about 200 delegates from various local authorities in the north-west of England. There is much worry about the housing benefit shake-up, and the conference must have considered the implications of the changes to the housing benefit system and how the Government are organising future handouts while saving £500 million.
Local authorities have gone through chaos. They have only recently got the housing benefit system right after the last change, and they regard any further upheaval as unnecessary, costly and time-consuming. I am sure that the conference will have expressed its concern about the restructuring of the system and the reduction from 96 to 80 per cent. of the moneys that local government gets from Whitehall. It is estimated that that cut will cost Manchester city council about £12 million. The Government have promised to take that reduction into account when agreeing levels of support for local authorities, but councils are extremely dubious about the Government's intentions, because of their track record.
Another serious worry is the time factor in making changes. Last time the chaos reigned for nearly two years, for recipients and administrators of the system alike. Many hon. Members have referred to their advice bureaux. Mine is in a highly deprived area of the city and it was always full of worried people on Friday evening and Saturday. I fear a recurrence of that, and of many elderly people and people who rely on benefits waiting for advice because they are bemused by the complexities of the system. So great was the confusion last time that local authorities put out leaflets which tried to describe in layman's terms what was going on. It was a traumatic experience for many elderly people. Anybody who runs an advice bureau must be worried about that happening again.
This time, however, town halls have just 21 months before the deadline of April 1987. Councillor Frances Done, the chairman of Manchester city council's finance committee, has declared that the cut in funding is a direct attack on local government finances and could cause dire administrative problems. This is especially true for inner-city areas such as Manchester. Extra staff will be required to cope with the paperchase that will result from these proposals. Manchester city council is trying to employ an extra 20 or 30 staff to administer the system—to collect rates towards which tenants will have to contribute 20 per cent., water rates and the heating element of rates, all of which will be an administrator's nightmare.
We have heard much about the losers and the gainers today. It is difficult to get figures these days, but it seems that about 500,000 people will gain, that 1 million people will lose up to £1·40 a week and that 5 million people will lose between £1·40 and £3 a week. It is estimated that 650,000 people will lose between £3 and £6 a week, and that 150,000 people will lose more than £6. In all, 7 million people will be losers. Those are some conclusions of the research carried out by Manchester city housing benefit section.
In Manchester alone 112,000 people receive housing benefit, and of those 105,000 will lose some or all of that benefit. With all the pressures of collection and administration, the authority has a dismal prospect of seeing any reduction in the £12 million rent arrears. Indeed, with the Government's proposals, and with the extra administration and rent collection, it is estimated that there will be a massive increase in rent arrears.

Mr. Favell: Does the hon. Gentleman agree that, with ratepayers being obliged to pay at least 20 per cent. towards their rate bills, the proposal will increase the public accountability of local authorities to their ratepayers? Does he think that that will be good for Manchester city council, which employs twice as many local government employees per head of the population as neighbouring Stockport?

Mr. Litherland: We could debate rates all night. Manchester's rate is high because of the Government's cuts. The extra administration that is being put on the authority by the Government will require far more local government finance. With rate capping, where is the money to come from? The Government always blame shortfalls on the greed of Manchester city council or the people who live in Manchester. In the past we have provided marvellous services, and they must be paid for. People are willing to pay for them.
The hon. Gentleman is not comparing like with like. In Manchester we have massive deprived inner city areas, with massive unemployment, including massive youth unemployment, and elderly, sick and disabled people. There has been a mass exodus from the city to the new towns and suburbs. People have left the deprived areas. That is why we have asked for more rates. We could debate rates all night, but at present we are debating housing benefit, which is only one aspect of the matter.
All the extra responsibilities of local authorities and housing associations will have their effect on administration and finance. Once again chaos will reign supreme. One of the briefs that I have received about what the Government should do states:
Housing Benefit should be based on an equality of treatment between those who get 'benefit' in the form of tax relief on mortgage interest and those who receive benefit to help with rent and rates. The Green Paper in no way addresses itself to this relationship.
Rising levels of council rents mean that housing costs have become a much higher proportion of the outgoings of families on low income. Not only does the Government not recognise this but, having already slashed the Housing Benefit budget, it is drastically reducing entitlement to Housing Benefit. Fully adequate provision for housing costs must be introduced.
The Government should take heed of that.
Finally, I wish to reiterate the point made by my hon. Friends. The Government are to make a cut of £500 million in the amount of benefit paid to the poorest people, who cannot pay, so that they can meet their manifesto commitment of tax handouts for the rich. That is their only purpose.

Mrs. Edwina Currie: I hope it will not be necessary to make an apology for being on my feet twice in one day, but housing benefit is an extremely important subject. We spend another £4,000 million on it, and it affects large and increasing numbers of our constituents, yet from looking around the House this


evening it seems a desperate pity that so few hon. Members have bothered to take an interest in the subject. It is not enough to moan about housing benefit when there are changes. Hon. Members should be present to put points to the Ministers at the opportunity that they have.
The hon. Member for Manchester, Central (Mr. Litherland) will be surprised to hear that I agree with much of what he said. Many of the administrative problems that he highlighted, especially in the major cities, will cause considerable trouble when the proposed changes are introduced.
Before I go on to my main remarks, I wish to pick up the comments of the hon. Member for Ashfield (Mr. Haynes), who claimed with great fervour and determination that hon. Members could obtain relief on a second home. If he is claiming tax relief on the mortgage for a second home, he had better be careful, because the Inland Revenue will come down on him like a ton of bricks. We are not entitled to claim tax relief on a second home. The only people who can do so are those who have a second home for a dependent relative, and that dependence must be disability, age or, at a pinch, mental handicap. The provision does not apply to hon. Members. What we can claim is an allowance from our parliamentary allowance against the interest on any mortgage that we might pay—exactly the same as though we were paying rent. We can claim that, but not tax relief.

Mrs. Beckett: In a sense, the hon. Lady has made the point that I was about to make. I was about to say that she was nit-picking. My hon. Friend the Member for Ashfield (Mr. Haynes) talked about the assistance that Members of Parliament can get if they buy second homes. The hon. Lady said that his remarks were true. Whether she chooses to define it as tax relief on a second mortgage matters not to me or to my constituents—or, I suspect, to her constituents.

Mr. Deputy Speaker: Order. I think that we had better get back to the housing benefit that is mentioned on the Order Paper.

Mrs. Currie: Yes, Mr. Deputy Speaker. It is simply a question of what we mean by the words we use. I was simply trying to assist the hon. Gentleman.
The housing benefit scheme was born of good intentions. It was intended to simplify the previous complicated rebates system, and it was intended that the DHSS should pay rent directly to landlords or to housing authorities so that there could be no abuse. I was the chairman of the housing committee in Birmingham when the scheme was introduced, and I welcomed it at the time and thought it was entirely laudable. But it is worth pointing out that, although all Labour Members have spoken tonight about the importance of the housing benefit system, when it was introduced, they voted against it. They did not want it in the form in which it was introduced, but now they want to keep it in the form in which it was introduced. They want no changes. They should remember some of the debates that took place before I entered the House.
Some of the problems that resulted from the scheme were caused partly by the lack of time to introduce it. That problem was recognised by the previous Minister of State and the previous Under-Secretary of State, and the period for the introduction of housing benefit was extended. Part of the problem was caused by the pressure for concessions,

and the need constantly to recognise the extra needs and arrangements that were required. However, rough justice may be the best system. Every time we try to make the system fairer, we make it more complicated, and the complications destroy the fairness that we try to introduce.
The result is that the system is fiendishly complicated, with six separate tapers, different systems for rent and rates and different systems for the type of claimants. It has had unforeseen results that no one in the House would have wanted. It means that young people are better off leaving home than if they stayed at home. It destroys the link between rate-paying and voting. No one intended that to happen, but it did. It is so generous that, in many cases, a majority of the people in some areas are in receipt of benefit. In the ward that I represented in Birmingham which had almost half council tenants, in 1982, 50 per cent. were claimants of one sort of another. Now the figure is 75 per cent., and it is increasing. Their economic circumstances have not changed. What has changed is the generosity of the system.
The stigma now attaches to the people who do not claim benefit. One of my problems in my advice bureaux is trying to explain to good-hearted people, many of whom have worked in the mines, paid for their pensions and are comfortably off—thank God they are—that they are not entitled to housing benefit. So much for the stigma.
I suspect that many people who claim rate rebates, especially owner-occupiers, do not realise that some public expenditure is involved. They believe that their rates forms arrive with the rebates included, or simply crossed off, and that no transaction or handing over of money is involved. They repeatedly say to me, "I do not get anything from the state. I am not a scrounger. I do not get anything that I have not paid for." They do not realise that rate rebates, like many other benefits, are non-contributory benefits which cost the Government money. That money comes from other taxpayers, and if they are at the same time, as many of them are, occupational pensioners and taxpayers they are paying for their own rebates and they do not realise it.
Another aspect of the system which has escaped attention and not been mentioned this evening, is that the existence of generous non-cash-limited housing benefit means that no local authority has any incentive to keep down its rents. The Department of Environment for some years has imputed a rent increase each year as it calculates the rate support grant, housing investment programme and so on. I raised the rents in the year that I was chairman by more than that figure. I did it to get some money for repairs. Every penny was spent on housing repairs. I did it to encourage people to take another look at housing purchase, and we were successful at that as well.
I could do that with impunity, because the DHSS would pay. One of the results is seen clearly in a quotation from the Rowe report on the housing benefit review. In paragraph 1.20 he said:
Since 1979 rents and rates have increased much faster than inflation so that, according to DHSS figures, expenditure on rent rebates alone is now over 50 per cent. higher than it would have been than if rents and rates had remained at the same level in real terms as in 1979.
In other words, the existence of the benefit generates increases in rents. No housing authority has any incentive to keep down its rents.

Mrs. Beckett: That is the most stupid thing I have ever heard the hon. Lady say, and that is saying something. Is


she completely unaware that the rise in rents has something to do with the £1·3 billion that the Government have cut from the general housing subsidy? It has nothing to do with the generosity of housing benefit. The cut in housing subsidy was justified by the Government because they said that they would be able to give housing benefit which would target help on the poorest—and now they are cutting housing benefit.

Mrs. Currie: Of course I am aware of that. I simply make the point that it is possible to increase the rents—and I did it, so I know what I am talking about—it is possible to increase the rents by more than the loss in housing subsidy, by more than the increase in rents enforced by the Department of the Environment, and by more than the money that is needed for repairs. It is possible to increase the rents by whatever figure one fancies, because the DHSS will pay.
It is not just Sheffield that has done that. It is every local authority in the country; and many of them are now achieving something which I regard as quite wrong, and that is a surplus on their housing revenue account—in other words, a profit, and the profit is coming from the DHSS.

Mr. Frank Field: I wish to return to the point that my hon. Friend the Member for Derby, South (Mrs. Beckett) made. We have had statement after statement from Ministers saying that they are deliberately putting up rents partly to encourage buying, as the hon. Lady has noted. The defence of that has been that those on lower incomes and those who are poorest will not be affected because of the rebate scheme. We have now had the rents increased, but we are having the rebate scheme cut. Surely that is wrong.

Mrs. Currie: I do not disagree with a word that the hon. Gentleman says, except his last sentence. He has described the situation very aptly. The sad thing—I am sure that he will join me in this—is that, despite all the extra money that has been spent on housing and despite the huge increase in housing benefit, so many people are still badly housed. There are more than 30,000 empty council properties in London alone waiting for repairs, but the money does not get spent on repairs. It gets spent in other ways, and to my mind that is quite wrong.
Something had to be done. The proposals in the Green Papers are intended to remove all that muddle and to replace it with something much simpler. By insisting that we all actually contribute to our rates, we will be restoring some local democracy. Surely everyone on both sides of the House can say that those are laudable intentions, just as we said three or four years ago.
I am afraid that I am a bit of a grotty old cynic. I have a couple of words of caution to offer to my right hon. and hon. Friends on the Front Bench. The first refers to the remarks that were made by the hon. Member for Manchester, Central (Mr. Litherland) about the small bills for the 20 per cent. that people have to pay towards their rates. He mentioned similarly the bills that we have to collect at the moment in the local authorities for water rate payments and so on. He was absolutely right. The average payment for rates by a council tenant is about £5 a week. If we are going to take 20 per cent. of it—that is £1 a week—and if we seriously think that local authorities

will spend an awful lot of time chasing around for bills of £1 a week, I have to say that I think that my right hon. and hon. Friends are mistaken. What will happen is the same as with the water rates: the local authority will end up writing it off. The benefit to be achieved simply will not match the adminstrative costs.
Further, if my colleagues seriously think that people are going to start voting Tory in huge numbers in the inner cities because instead of paying £1·05 per week they may be asked to pay £1·10 per week I think that they are mistaken. I hope that I am wrong but I honestly do not think that that amount of money is sufficient to wake people up from their apathy of not voting or to change their voting intentions.
My other word of caution is directed to the Department of the Environment and the Treasury as much as to the DHSS. It came out of a discussion that we had yesterday in the Select Committee on Social Services, which is doing reviews of the reviews. My right hon. Friend the Minister was there. The Green Paper proposes to reduce the DHSS contribution to housing benefit administration and the actual contribution to housing benefit to about 80 per cent. At present, the DHSS pays 90 per cent. or 106 per cent. depending on the benefit. At present, local authorities have to find £135 million. We have seen various calculations which suggest that local authorities in the future will have to find anything from £400 million to £700 million extra.
According to volume 2 of the Green Paper, paragraphs 365 and 366, that will be taken into account in the rate support grant. Well, will it? If we seriously say to the Department of the Environment that we want £500 million extra for rate support grant, will it actually cough up? I hope so, because if it does not, there will be yet more rates increases, most of which will be borne by the ratepayers, and many more people will qualify for housing benefit. The poor old DHSS, which pays for just about everything else in this country, will then end up spending even more. I have a nasty feeling that the benefit system is so complicated and so all-embracing that almost every change will provoke howls of rage and end up costing us more. It is like trying to get a fat lady into a corset. It will all pop out somewhere else. I see my hon. Friend the Whip looking at me—I wish that he would not while I am talking about fat ladies and corsets.
If we do nothing about the situation, we simply bank up a bigger and bigger bill and yet more people will be claimants, including the most respectable people, who have never before asked or wished to claim a noncontributory benefit. People like that should not be drawn into this all-suffocating net. I applaud every effort made by my right hon. and hon. Friends to improve the housing benefit system and I wish them luck.

Mr. Norman Buchan: Please don't stop!

Hon. Members: She has already finished.

Mr. Speaker: Has the hon. Lady finished?

Mrs. Currie: Yes.

Mr. Allen McKay: Like the hon. Member for Derbyshire, South (Mrs. Currie) I also have a nasty feeling. I have a nasty feeling that the Government are continuing the process of milking the


poor. Year after year they have "reorganised" the housing benefit system. There were reorganisations in 1983, 1984 and 1985 and the Green Paper seeks to continue the process into the future.
The reason for all this reorganising is that the Government have fallen into the trap to which the hon. Member for Derbyshire, South referred. By cutting central Government funding to local government, they forced local government to put up the rates. To get over that, they brought in a rate-capping system to ensure that local government could not recover for the benefit of their localities the money that had been taken from them by the Government. The Government also brought in a system which forced local authorities to put up rents.
Naturally, every time the rents and rates went up, the number of claimants increased. Indeed, we encouraged people to apply for benefits that were theirs by right. The Government have now recognised that consequence and the Green Paper seeks to do a rate-capping job on the poorest tenants. In my area we now have 21,525 council tenants claiming rent and rates rebates, 554 indirect ratepayers and 13,669 direct ratepayers claiming rate rebates.
That is a total of 35,748, or 41·63 per cent. of the population. Fifty per cent. of my constituents receive rent and rate rebates. That is a direct result of the Government's policy of forcing up rent and rates.
The new proposals are no more than an excuse to claw back some of the money that the Government are having to pay out. No figures have been provided. They have been left out for two possible reasons: first, so that calculations cannot be made and, secondly, to gauge the reaction of the country and then to provide the figures.
What will happen to housing benefits in November 1985? In June 1985 the Secretary of State announced the benefit uprating. The changes deliberately resulted in a cut in housing benefit entitlement for many recipients. About 50 per cent. of my constituents will be affected by the changes. It is estimated that 2 million households will suffer reductions and that 500,000 households will receive no benefit. Those who will be affected are poor people with families and pensioners. There will be a further twist to the spiral and a further increase in rent and rates. More people will try to obtain benefit from the housing benefit scheme. The Government will then have to pay out more money, which will result in a further twist to the downward spiral.
The Government were given the opportunity to introduce a scheme that would benefit people, not take benefits away from them. I accept that money for such schemes has to be found from somewhere, but money should not be taken from the poor to be given to those who are even poorer. Money should be taken from those who can afford it to help those in need. In that way the economy will grow, not decline. I am certain that we shall debate this matter again, because 50 per cent. of the population will be affected by it.

The Minister for Social Security (Mr. Tony Newton): I hesitated to intervene in the argument about how many households could be provided with mortgage tax relief, but I am tempted to think that there ought to be some kind of tax relief for having to do this kind of thing twice over in one evening.
Two elements in the debate are related but distinct. I shall try to deal with some of the strategic questions that were raised by the hon. Member for Derby, South (Mrs. Beckett). First, however, it would be sensible to say a few words about another element in the debate: last week's uprating and, in particular, the proposal about the housing benefit rates taper. I shall not rehearse the details of the uprating, apart from reiterating that against the background of a £2 billion increase it is ridiculous to say that the Government are solely concerned with cutting social security benefits.
The housing benefit needs allowances were fully uprated by 5·8 per cent. Far from housing benefit expenditure being cut, it is likely that this year it will be larger than it was last year, though just a little less large than it would have been but for the changes that we announced last week. About 7 million people will be helped by housing benefit, to which must be added a fact that was acknowledged by a few hon. Members—that about one third of a million low-paid families with children will receive additional housing benefit over and above what they would otherwise have received as a result of the real improvement in the child needs allowance.
That is the context in which the motion has sought to concentrate only on the proposal to increase from 9p in the pound to 13p in the pound the rate at which help is withdrawn from people in the upper ranges of those on housing benefit in respect of help received with their rates.
I wish to emphasise three points, even in relation to that proposal. First, someone on supplementary benefit will not be affected in any way at all. His housing benefit remains exactly the same. Secondly, no one with an income below the needs allowance is affected in any way at all. That means that no single pensioner will be affected who has an income below £48·55, and no married pensioner couple will be affected with an income of just over £71. No one at any level of income will be affected at all in respect of help with rent.
The hon. Member for Derby, South overplayed her hand in some of the figures she gave. She claimed that from November a pensioner couple paying £5 domestic rates would not be entitled to benefit with an income of £85. If she checks her figures, she will find that in November such a couple will still be on benefit with a weekly income of £90. That is the advice that I have been given.
It puts these figures in context when I repeat that the average loss for pensioners in respect of the housing benefit rates taper proposal is about 47p a week. That should be contrasted with the fact that the retirement pension is going up by £4 a week for a married couple. Put another way, a pensioner will have to have an income of £13 above the basic state retirement pension level to lose as much as 10p a week. That helps to put the matter in context.
Having made those remarks about the uprating, I come to the major theme of the debate, including the serious and thoughtful speech of the hon. Member for Derby, South about the review. So far as I can, I shall respond in like terms. To do so, I must begin by putting housing benefit into the broader context of some of the other proposals in the review.
Alongside the pension proposals and the family credit proposal, the most important theme of the review is one that I have emphasised on a number of occasions. This is probably the first attempt ever, certainly in 50 years, to


look at income-related benefits as a whole. Beveridge did not do that job. In the succeeding period, things have turned out optimistically under any Government, but he assumed that income-related benefits would be a small tail to the system. That has never been true. In the years immediately after Beveridge, 1 million people were on supplementary benefit. It was 2 million in the mid-1960s, 3 million by the late 1970s and about 4 million now. Neither side of the House can crow about that record.
Because Beveridge had assumed that income-related benefits would be a relatively insignificant part of the system, no one has ever stood back and looked at it as a whole. There have been changes in supplementary benefit from time to time. We invented rent and rates rebate schemes and turned them into housing benefit. We invented FIS in the early 1970s, and that has been improved and extended since. But no one has ever attempted to look at the range of income-related benefits as a whole. They all have different rates and structures as well as their own complexities, and they have contributed mightily to the problems of the poverty and unemployment traps, which are now such a marked and unhappy feature of the British social security system.
Underlying the proposals on housing benefit, which have been the subject of so much criticism tonight, is the fact that for the first time there is an integrated approach across the range. There is a common basis of assessment using net income instead of a mix of net and gross income as at present. Perhaps more important still, there is a common benefits structure. Our family premium concept was carried through from one benefit to the other, and the age relationship for help with children was carried through from supplementary benefit to housing benefit into the proposed new family credit.
Alongside those two major simplifications in housing benefit, we are bringing rent and rates together with a single taper instead of two schemes with six different tapers, which lead to the sort of complications to which the hon. Member for Woolwich (Mr. Cartwright) referred.
Having presented in the review this pattern of income-related benefits as a whole, we will make a number of major gains. It virtually removes the unemployment trap in the literal sense of people being better off out of work than in work, and it greatly eases the poverty trap and in particular eliminates the possibility of marginal tax rates over 100 per cent.—in other words, that one gets worse off by earning more money. Those are major gains across the whole field.
In terms of housing benefit specifically, the structure that we have proposed produces for the first time a system which is fair as between those in and those out of work because it is giving help related to 100 per cent. of rent at the same level of income for supplementary benefit cases and those who are not on supplementary benefit. That in turn enables us to get rid of housing benefit supplement—one of the worst single complexities of the entire social security system—and it enables us to bring about greater equality of treatment between those receiving help with their rent and those receiving help with their rates — that is, between tenants and owner-occupiers.
All those changes—I ask Opposition Members who are critical of expenditure to concentrate attention also on these structural proposals—are major gains in terms of

the efficiency of the social security system for any Government, whether this Government or any future Government, in making effective use of whatever resources they decide to spend. That is again regardless of the party political knockabout argument of how much money one spends at a particular time.
I had my doubts whether the hon. Member for Derby, South had fully understood the importance of this in her remarks about high rent schemes when she suggested that, as a result of the review, those who are affected by the current high rent schemes would suffer. One of the important points about going to 100 per cent. help at the same level of income in respect of rent is that the need for high rent schemes disappears. Those high rent schemes had to be invented as an additional complication to the system because we were giving 100 per cent. help to those on supplementary benefit, but help related to only 60 per cent. of rent for those who were not on supplementary benefit and standard cases. High rent schemes go out of the window not because there are great numbers of new losers automatically but because the system is fairer and more equitable between those two different groups of people.
These changes necessarily mean changes in the relativities among those who are on housing benefits. There will be some who do better than they otherwise would have done and some who do worse than they otherwise would have done. As the House knows, it is impossible for me to give figures of exactly what will happen because they depend on income support rates and other factors that we cannot yet settle.
Broadly, the position will be that those who have high rents or low incomes will do better than they otherwise would have done — a perfectly reasonable gain for targeting—and those who have lower rents or the higher range of incomes among those on housing benefit will probably do worse than they otherwise would have done. That is just another way of describing more effective targeting, which is what we are aiming at in the proposals.
I hope that Opposition Members, in continuing the political debate about how much money should be spent, will recognise the real gains in terms of the fairness and effective use of resources which these proposals make possible for any Government from the time of their introduction.
It seems to me that what underlines the motion as much as anything else is that argument about money. That reflects in turn the Labour party's persistent refusal to recognise that spending has to be paid for, and very often by those with very little more money than those one is seeking to help, and their refusal to recognise that the merciless inflation over which the last Labour Government presided did more damage to the poor than anything that the present Government have done on social security. What this motion shows more than anything else is that the Labour party has not thought seriously about the real problems of social security, let alone of its reform. Its position is simply that of a party that will say and do anything to get power — power which, if Labour Members got it, they would not have the slightest idea how to use.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 135, Noes 221.

Division No. 252]
[10.00 pm


AYES


Abse, Leo
Hogg, N. (C'nauld &amp; Kilsyth)


Archer, Rt Hon Peter
Holland, Stuart (Vauxhall)


Ashley, Rt Hon Jack
Howell, Rt Hon D. (S'heath)


Ashton, Joe
Hoyle, Douglas


Atkinson, N. (Tottenham)
Hughes, Robert (Aberdeen N)


Banks, Tony (Newham NW)
Hughes, Simon (Southwark)


Barnett, Guy
Janner, Hon Greville


Beckett, Mrs Margaret
Kilroy-Silk, Robert


Beggs, Roy
Kirkwood, Archy


Benn, Tony
Lamond, James


Bennett, A. (Dent'n &amp; Red'sh)
Leadbitter, Ted


Bermingham, Gerald
Leighton, Ronald


Blair, Anthony
Lewis, Ron (Carlisle)


Boothroyd, Miss Betty
Lewis, Terence (Worsley)


Boyes, Roland
Litherland, Robert


Bray, Dr Jeremy
Lofthouse, Geoffrey


Brown, Gordon (D'f'mline E)
McCartney, Hugh


Brown, R. (N'c'tle-u-Tyne N)
McCrea, Rev William


Brown, Ron (E'burgh, Leith)
McDonald, Dr Oonagh


Buchan, Norman
MacKenzie, Rt Hon Gregor


Caborn, Richard
McNamara, Kevin


Callaghan, Jim (Heyw'd &amp; M)
McWilliam, John


Campbell-Savours, Dale
Madden, Max


Carlile, Alexander (Montg'y)
Martin, Michael


Carter-Jones, Lewis
Maxton, John


Cartwright, John
Meacher, Michael


Clark, Dr David (S Shields)
Mikardo, Ian


Clay, Robert
Millan, Rt Hon Bruce


Cocks, Rt Hon M. (Bristol S.)
Miller, Dr M. S. (E Kilbride)


Cohen, Harry
Mitchell, Austin (G't Grimsby)


Concannon, Rt Hon J. D.
Molyneaux, Rt Hon James


Conlan, Bernard
Oakes, Rt Hon Gordon


Cook, Frank (Stockton North)
O'Brien, William


Cook, Robin F. (Livingston)
Park, George


Corbyn, Jeremy
Parry, Robert


Cowans, Harry
Patchett, Terry


Cox, Thomas (Tooting)
Pavitt, Laurie


Craigen, J. M.
Pendry, Tom


Crowther, Stan
Pike, Peter


Cunliffe, Lawrence
Powell, Rt Hon J. E. (S Down)


Davis, Terry (B'ham, H'ge H'l)
Prescott, John


Deakins, Eric
Redmond, M.


Dewar, Donald
Rees, Rt Hon M. (Leeds S)


Dixon, Donald
Richardson, Ms Jo


Dobson, Frank
Roberts, Allan (Bootle)


Dormand, Jack
Roberts, Ernest (Hackney N)


Dubs, Alfred
Ross, Stephen (Isle of Wight)


Eastham, Ken
Rowlands, Ted


Edwards, Bob (W'h'mpt'n SE)
Ryman, John


Evans, John (St. Helens N)
Sedgemore, Brian


Field, Frank (Birkenhead)
Shore, Rt Hon Peter


Fisher, Mark
Short, Mrs R.(W'hampt'n NE)


Flannery, Martin
Silkin, Rt Hon J.


Foot, Rt Hon Michael
Skinner, Dennis


Forrester, John
Smith, Rt Hon J. (M'kl'ds E)


Foster, Derek
Snape, Peter


Fraser, J. (Norwood)
Soley, Clive


Freeson, Rt Hon Reginald
Spearing, Nigel


Freud, Clement
Stott, Roger


George, Bruce
Strang, Gavin


Godman, Dr Norman
Torney, Tom


Golding, John
Wareing, Robert


Gould, Bryan
Welsh, Michael


Hamilton, James (M'well N)
Winnick, David


Hamilton, W. W. (Central Fife)
Young, David (Bolton SE)


Harman, Ms Harriet



Harrison, Rt Hon Walter
Tellers for the Ayes:


Hart, Rt Hon Dame Judith
Mr. Ray Powell and


Haynes, Frank
Mr. Allen McKay.


Heffer, Eric S.



NOES


Adley, Robert
Arnold, Tom


Alexander, Richard
Ashby, David


Alison, Rt Hon Michael
Aspinwall, Jack


Amess, David
Atkinson, David (B'm'th E)


Ancram, Michael
Baker, Nicholas (N Dorset)





Baldry, Tony
Lilley, Peter


Banks, Robert (Harrogate)
Lloyd, Peter, (Fareham)


Batiste, Spencer
Lord, Michael


Bellingham, Henry
Luce, Richard


Bendall, Vivian
Lyell Nicholas


Bennett, Rt Hon Sir Frederic
McCurley, Mrs Anna


Benyon, William
MacGregor, John


Best, Keith
MacKay, John (Argyll &amp; Bute)


Biffen, Rt Hon John
Maclean, David John


Biggs-Davison, Sir John
McNair-Wilson, P. (New F'st)


Blackburn, John
McQuarrie, Albert


Blaker, Rt Hon Sir Peter
Major, John


Bonsor, Sir Nicholas
Malins, Humfrey


Boscawen, Hon Robert
Malone, Gerald


Bottomley, Peter
Maples, John


Bottomley, Mrs Virginia
Marlow, Antony


Bowden, Gerald (Dulwich)
Marshall, Michael (Arundel)


Brandon-Bravo, Martin
Mates, Michael


Bright, Graham
Mather, Carol


Brinton, Tim
Mawhinney, Dr Brian


Brooke, Hon Peter
Maxwell-Hyslop, Robin


Brown, M. (Brigg &amp; Cl'thpes)
Mayhew, Sir Patrick


Bruinvels, Peter
Mellor, David


Bryan, Sir Paul
Merchant, Piers


Burt, Alistair
Meyer, Sir Anthony


Butterfill, John
Mills, Iain (Meriden)


Carlisle, John (N Luton)
Miscampbell, Norman


Carlisle, Kenneth (Lincoln)
Mitchell, David (NW Hants)


Carttiss, Michael
Moate, Roger


Cash, William
Montgomery, Sir Fergus


Chalker, Mrs Lynda
Morris, M. (N'hampton, S)


Chapman, Sydney
Morrison, Hon C. (Devizes)


Chope, Christopher
Moynihan, Hon C.


Clark, Hon A. (Plym'th S'n)
Murphy, Christopher


Clarke, Rt Hon K. (Rushcliffe)
Needham, Richard


Clegg, Sir Walter
Nelson, Anthony


Colvin, Michael
Neubert, Michael


Conway, Derek
Newton, Tony


Coombs, Simon
Nicholls, Patrick


Couchman, James
Normanton, Tom


Cranborne, Viscount
Norris, Steven


Critchley, Julian
Onslow, Cranley


Crouch, David
Oppenheim, Phillip


Currie, Mrs Edwina
Oppenheim, Rt Hon Mrs S.


Dickens, Geoffrey
Osborn, Sir John


Dicks, Terry
Ottaway, Richard


Dorrell, Stephen
Page, Sir John (Harrow W)


Dunn, Robert
Page, Richard (Herts SW)


Eggar, Tim
Pattie, Geoffrey


Emery, Sir Peter
Pawsey, James


Evennett, David
Percival, Rt Hon Sir Ian


Eyre, Sir Reginald
Porter, Barry


Fairbairn, Nicholas
Portillo, Michael


Fallon, Michael
Powell, William (Corby)


Farr, Sir John
Powley, John


Favell, Anthony
Prentice, Rt Hon Reg


Fookes, Miss Janet
Price, Sir David


Fowler, Rt Hon Norman
Proctor, K. Harvey


Fox, Marcus
Rees, Rt Hon Peter (Dover)


Gale, Roger
Rhodes James, Robert


Gardner, Sir Edward (Fylde)
Rhys Williams, Sir Brandon


Garel-Jones, Tristan
Ridley, Rt Hon Nicholas


Glyn, Dr Alan
Ridsdale, Sir Julian


Grant, Sir Anthony
Roberts, Wyn (Conwy)


Greenway, Harry
Robinson, Mark (N'port W)


Griffiths, Sir Eldon
Roe, Mrs Marion


Hamilton, Hon A. (Epsom)
Rossi, Sir Hugh


Hayes, J.
Rost, Peter


Hickmet, Richard
Sackville, Hon Thomas


Higgins, Rt Hon Terence L.
Sainsbury, Hon Timothy


Holland, Sir Philip (Gedling)
Sayeed, Jonathan


Hunter, Andrew
Shaw, Sir Michael (Scarb')


Jenkin, Rt Hon Patrick
Shelton, William (Streatham)


Johnson Smith, Sir Geoffrey
Shepherd, Richard (Aldridge)


King, Rt Hon Tom
Shersby, Michael


Latham, Michael
Sims, Roger


Lawson, Rt Hon Nigel
Skeet, T. H. H.


Lennox-Boyd, Hon Mark
Smith, Sir Dudley (Warwick)


Lewis, Sir Kenneth (Stamf'd)
Smith, Tim (Beaconsfield)


Lightbown, David
Soames, Hon Nicholas






Speed, Keith
Vaughan, Sir Gerard


Speller, Tony
Viggers, Peter


Spence, John
Waddington, David


Spencer, Derek
Wakeham, Rt Hon John


Spicer, Jim (W Dorset)
Walden, George


Squire, Robin
Walker, Bill (T'side N)


Stanbrook, Ivor
Walker, Rt Hon P. (W'cester)


Stanley, John
Wall, Sir Patrick


Steen, Anthony
Waller, Gary


Stern, Michael
Ward, John


Stevens, Lewis (Nuneaton)
Wardle, C. (Bexhill)


Stevens, Martin (Fulham)
Warren, Kenneth


Stewart, Allan (Eastwood)
Watts, John


Stewart, Andrew (Sherwood)
Wells, Bowen (Hertford)


Stewart, Ian (N Hertf'dshire)
Wheeler, John


Stokes, John
Whitney, Raymond


Stradling Thomas, J.
Wiggin, Jerry


Sumberg, David
Winterton, Mrs Ann


Taylor, Teddy (S'end E)
Winterton, Nicholas


Temple-Morris, Peter
Wolfson, Mark


Thomas, Rt Hon Peter
Wood, Timothy


Thompson, Donald (Calder V)
Yeo, Tim


Thompson, Patrick (N'ich N)
Young, Sir George (Acton)


Thorne, Neil (Ilford S)



Townsend, Cyril D. (B'heath)
Tellers for the Noes:


Tracey, Richard
Mr. Ian Lang and


Twinn, Dr Ian
Mr. Tony Durant.


van Straubenzee, Sir W.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's objective of securing a structure of income-related benefit which will ensure greater equality of help with housing costs for people at the same level of income, whether in or out or work, will remove the need for housing benefit supplement and will be simpler for staff to administer and for claimants to understand.

Armed Forces (Discipline)

The Minister of State for the Armed Forces (Mr. John Stanley): I beg to move,
That the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 1985, which was laid before this House on 11th June, be approved.
The purpose of the order is to continue in force for a further year the Army and Air Force Acts 1955 and the Naval Discipline Act 1957, which together provide the statutory basis for discipline in the three services. Annual parliamentary approval for the special legal position of the service man is a long-established constitutional concept, and the current arrangements for a quinquennial Armed Forces Act and annual extension of the Service Discipline Acts by Order in Council were endorsed by the Select Committee examining the last Armed Forces Bill in 1981.
As the House will understand, I cannot anticipate the provisions of the next Armed Forces Bill, but, as the current Act expires on 31 December 1986, the House is aware that it can expect to have a relatively early opportunity to consider service disciplinary primary legislation once again. I shall, however, give the Government's view on certain of the recommendations and observations of the Select Committee on the 1981 Armed Forces Bill.
It may be helpful if I remind the House that, in the debate on the order last year, I gave the Government's response to the Select Committee's recommendation regarding the detention and treatment of those who are subject to service law overseas and who are certified to be suffering from mental disorders. That response appears in the Official Report of 3 July 1984 at column 267.
Another of the Select Committee's recommendations was that social inquiry reports on young service offenders should be more readily available to courts martial. Naval courts martial already have such information provided by the naval personal and family service.
I am glad to tell the House that, in co-operation with the Soldiers', Sailors' and Airmen's Families Association, SSAFA, we have introduced for a trial period of a year, beginning on 1 May this year, a system which will allow social inquiry reports to be provided in cases where a young army or RAF service man is appearing before a court martial charged with a serious offence. These reports will usually be provided by SSAFA's qualified social workers. Social inquiry reports may also be called for in other cases, if appropriate.
Additionally, the background information on character and circumstances, which is now routinely provided to a court martial on all offenders, regardless of age or seriousness of the offence, has been improved. I believe that these two changes will materially strengthen the quality of the information provided to courts martial dealing with young offenders.
I should like to take this opportunity of expressing my warm gratitude to SSAFA for the help that it has offered us in this important area, and indeed for the excellent work that it and its predecessors have done over the past century on behalf of service men's families. I know that the whole House will wish to congratulate SSAFA upon reaching its centenary anniversary and wish it well for the next hundred years in the very valuable and very important work that it does.
The Select Committee considered the powers under the service discipline Acts to hold temporarily in a place of safety any children of persons subject to service law overseas who are considered to be at risk, and asked for a report to the House on the working of those powers. Since the introduction of this new power on 1 May 1982, only three place of safety orders have had to be made, and two children have been transferred to the United Kingdom under administrative arrangements. To date the present system has worked satisfactorily, but we are considering whether the existing statutory powers should be strenghthened in relation to the transfer of a child back to a place of safety in the United Kingdom.
The Royal Association for Disability and Rehabilitation brought it to the attention of the 1981 Select Committee that the Charity Commission had ruled that the Royal Star and Garter Home for Disabled Sailors, Soldiers and Airmen could not extend its beneficiary class to include ex-service women. The 1981 Select Committee recommended that
the Government should give active consideration to intervening in this matter, whether legislatively or otherwise".
The House will wish to know that a separate trust has now been set up, which enables disabled ex-service women to have their own wing at the home.
The Select Committee also urged that the rebuilding of the military corrective training centre at Colchester be completed as expeditiously as possible. I am glad to tell the House that the rebuilding of the detention quarters at the MCTC was completed at the end of May this year.
The Committee rightly highlighted the potential danger to the armed forces of the rising tide of drug abuse observable elsewhere. While there is no sign that drug abuse is a major problem in the British armed services, the House can be assured that the prevention of drug abuse in the armed forces is taken extremely seriously. I and my ministerial colleagues in the Department are personally closely involved in that issue, and additional preventive measures are now being taken.
In March this year we set up in the Department a tri-service drug abuse prevention group both to monitor and to make recommendations on further improvements in the prevention and the detection of drug abuse. A new tri-service drug abuse prevention film is in the final states of completion, and all three services are strengthening their drug education programmes and reviewing their guidance on penalties for drug abuse.
In the Department and in the services themselves we take the view that drug abuse in any form is subversive to discipline and morale, totally incompatible with the formidable responsibilities that every individual in the services assumes, and cannot be tolerated. We shall spare no effort to ensure that the cancer of drug abuse does not take a hold anywhere in our armed forces.

Dr. Norman A. Godman: I listened sympathetically to what the Minister said about drug abuse, and detection and prevention of that form of abuse. Are similar measures being taken vis-à-vis alcohol abuse? It is my view that, in civilian life, alcohol abuse is a greater problem than drug abuse. I wonder whether that is so for the armed services, too. If it is, what preventive measures are being taken?

Mr. Stanley: The Select Committee referred in its 1981 report to the problem of alcoholism, which is a matter that it has considered. I assure the hon. Gentleman

that a close watch is kept on alcoholism in the services. Education on alcoholism is given as well. I am confident that it is a limited problem in the armed services.

Dr. Alan Glyn: While it is known that alcohol abuse in the services is at the moment limited, drug abuse was also limited 10 years ago. Is my right hon. Friend aware that this problem could affect many more than it now affects?

Mr. Stanley: I take note of my hon. Friend's warning. I assure him that as I go round the services—hon. Members on both sides of the House who spend time with the services will endorse this—I notice that there is a great awareness of the dangers of alcoholism. The overwhelming majority of service men and women realise that the fitness that is required in the services and the training and fitness required for the battle fitness test means that someone with a strong propensity for alcohol would not do well in his service career. The service environment ensures that over-indulgence in alcohol would be a painful thing for someone doing the everyday jobs.
The annual debate on the continuation order inevitably tends to highlight the sectors where breaches of discipline may occur—the two interventions that we have heard show that. However, as the House recognises, the British Armed Forces are conspicuous not for breaches of discipline but for adherence to it. This is because our service men and women recognise that service discipline is a critical protection for themselves in the highly skilled, often fast-moving and sometimes dangerous work that they do. Anyone who is lax, disorderly, dishonest or disobedient is a serious liability. The service discipline Acts are a vital protection for those who serve in armed forces, and I commend the order to the House for approval.

Mr. Kevin McNamara: I join the Minister in congratulating the SSAFA on its centenary and the work that it will do with young offenders and the mentally disturbed.
The right hon. Gentleman passed over one point rather quickly—the renewal of the Act, which must take place by 31 December next year. The Bill will have to be published early in 1986, if not before Christmas, to enable a Special Select Committee to be appointed to look into the matter. I believe that it is one of the quirks of the House—perhaps quirks is the wrong word to use about this august body—one of the customs of the House that every hon. Member is entitled to serve on that Committee.
The Minister has given us a sign of some of the changes that might take place in that legislation, and some of the actions that the Government have taken on the recommendations made by the last Special Select Committee. In many ways, what he has announced is welcome. There are no state secrets in this matter, and the Secretary of State for Defence is a believer in open government — hence his announcement of the Crickhowell decision yesterday rather than in a week's time. In the interests of open government, it would be helpful if the House could see the papers going around the Department on a variety of matters that are likely to appear in the new Discipline Act. These are not state secrets but will be discussed. There might be contrary opinions, but


we all want the good welfare of and discipline in the armed forces, and it would be helpful to have some ideas of the discussions that are taking place.
We have been given an idea how the Government have met some of the Select Committee's recommendations. There were other recommendations, however, and it would be helpful to know why the Government are not able to accept some of them and why they have taken a given course of action.
I welcome the Government's decision to establish a special trust to deal with the disabled and wounded at the Star and Garter home. There was an anomaly and I only regret that it was not possible for the Charity Commissioners to find some way in which to amend the trust that established it rather than the Government having to establish a special trust, because there is still a distinction which I should have preferred not to exist.
We must also welcome what the Minister said about the SSAFA report. The Select Committee said that its terms of reference did not allow it to take evidence outside the United Kingdom. That Committee would have liked the opportunity at least to visit Germany to see conditions there and to talk to people of all ranks involved. The largest proportion of our armed forces abroad are in Germany and they face some of the most difficult problems. I hope that the Government, when establishing a special Select Committee, will enable it to take evidence outside the United Kingdom.
As for the role of SSAFA, we must welcome the decisions that have been made, especially with regard to young offenders. I am not at all certain what the role of the SSAFA welfare officer will be. I am not clear about his legal position or the status of his report. To what extent is it privileged? Is he completely analogous to a welfare officer who gives a report to a civilian court? Will he be properly protected?
The Minister said little about morale in the services, but discipline and morale go hand in hand. A force with high morale is well disciplined and, in those circumstances, we should have to have no recourse to these Acts. We know from what has been reported to us, however, that morale has suffered quite a blow in the past few years. The outflow is greater now than for some time and increased by more than 8 per cent. this year over last year. The outflow for some ranks is as high as 10·7 per cent.
The Government might tell us—they frequently have—that, compared with the Labour Government, they are restricting the flow. The Government have now been in power for six years, so they are now responsible for the outflow. It is remarkable that, to save £17 million, the Government are prepared to lose two Harrier trained pilots who cost £200 million in terms of training, service and input. Those figures are not mine but appeared in the Daily Telegraph. The straight training of a pilot officer can cost £3 million. We need to lose only three replacements and £17 million has gone. Moreover, overseas allowances are being swallowed up. It was a case of the Government saving the candle ends and losing the whole electricity supply, when they took that decision. It has caused morale at all levels to fall. Some Conservative Members have tried to argue that if the forces had learnt about the decision in a different way — if the commanding officer had

learnt about it and told his men differently — morale would not have fallen. It is a real blow to morale to get a wage cut.
It is not fair to regard the allowance merely as a straightforward cost of living allowance—it is more than that. It is compensation for serving abroad, and meets the additional expenses incurred living abroad, such as the extra cost of returning home for a single service man, telephone calls to the girlfriend, and extra presents taken home for mother and father. Those matters are all real, and increase expenses. Single service men, especially single privates and leading aircraft men, have suffered most from the cuts in Germany, and it is affecting their morale. Hon. Members on both sides of the House who have been abroad and visited the troops have all returned and said that that matter is rankling the forces. They are extremely upset about it.
If there had been a by-election in Aldershot, instead of in Brecon and Radnor, the cuts in local overseas allowances would not have been made, in an attempt to preserve the Army vote. I am not wishing that the hon. Member for Aldershot (Mr. Critchley) should have to fight a by-election. It is interesting that now that the Prime Minister is safely ensconsed in Milan, he felt it safe to go again to the Members' Dining Room for a meal.
I wish to turn to the question of drugs, which the Minister raised. The whole House will welcome the steps that have been taken, especially because when we last raised the matter in the House the Minister seemed to cast the figures for drug abuse lightly aside when he referred to them as microscopic. We now have a special unit which, I presume, will base its experience on the successful work in reducing drug abuse in the Royal Navy. I should like to know the numbers engaged in that work within the tri-service unit. Are there any special corps of the respective police forces of the armed forces involved in it, designated specifically for the purpose of chasing drug offenders and preventing drug pushing? That is especially interesting regarding Germany where there is easy access to drugs which come to northern Europe, especially through the Dutch ports. What is the cost of the unit? I believe that the Select Committee will want to look at that in considerable detail when it investigates these matters because that matter engaged its attention last time.
In replies to my questions no distinction has been made between hard and soft drugs, and their abuse in the services. It would be interesting to know whether the new units will concentrate their efforts first on preventing hard drugs and then on educating service men out of the abuse of soft drugs. We welcome the decision that has been taken.
That, to a certain extent, finishes my words of congratulation. During the past year there has been an enormous volume of matter and detail, which the new Select Committee will want to study, but which should be mentioned as the House has not yet had a proper chance to discuss it and, therefore, hon. Members have not received answers to any questions that they may have. The first is the suggestion in some of today's newspapers—I do not wish to go into the merits of the case—that there was a slackness in procedures when dealing with the spy case. The NCO who gave evidence admitted that he had not kept a full check when men were taken out for interrogation by the special branch. I do not suggest that anything untoward happened, but the fact that records were not kept must be examined, because it is important


in all cases to pay meticulous attention to detail in the procedures followed, not only in the interests of the accused but in the interests of the men who look after prisoners.
Secondly, this has been a remarkable year for lost documents. Documents have been found in rubbish heaps and have fallen off the backs of lorries, and now we hear of documents being stolen from the home of a rear-admiral. Will disciplinary proceedings be taken against that rear-admiral for having some restricted documents in his home, or were they documents that he was allowed to take home? These are important matters, because we can perceive a general air of laxity. The documents that were found on the rubbish heap contained details of Tornado servicing. The documents that fell off the back of a lorry contained naval secrets. Some restricted papers concerning Trident were stolen from the home of a rear-admiral. I am sure that the Select Committee will wish to examine those matters. I do not expect precise answers to those queries, but I believe that the Minister should be aware of the anxiety that has been caused.
This year, we had an interesting change in Queen's regulations, which did not have to come before the House, extending the curb placed upon members of the armed forces to join movements or take part in marches. That seemed to restrict considerably the political activities of members of the armed forces. I do not suggest that service men should parade round in their uniforms demanding the removal of the Prime Minister. But there should be opportunities for service men to take part in normal marches and demonstrations. They should not be disciplined, as citizens — albeit special citizens — for taking part in normal political activities. What if there was a demonstration against the loss of housing benefit—a matter which we discussed in the House earlier today? Would that be regarded as a movement or a march in which a service man could not participate without fear of disciplinary proceedings? We must examine the new restrictions that have been placed on free discussion and free participation in political activity, in addition to the rigorous rule that has existed until now.
This year, we have also seen the development of pink and yellow cards. The pink card is given to service men serving at Greenham or Molesworth, and wherever we store missiles or other weapons, enabling them, in certain circumstances, to shoot at unarmed fellow citizens of the United Kingdom. Those cards have a restricted legal value. For example, in Northern Ireland the yellow card has been regarded as a policy document, not in any way as the conclusive defence of a soldier. The issue of such cards has made the Army more an instrument of government than an instrument of an objective state.
It is possible, under many of the regulations, for such matters not to be properly examined, because they do not conform with the old common law procedures, which allowed troops to be used to quell civil disturbances only at the request of a magistrate. The matter could always be examined in the courts. The new proposals in these documents can give a false sense of security to the service man involved, who might believe that he is protected by the regulations and the advice given on the cards. That defence would not stand up in court.
Secondly, it might be used as an excuse or justification for action which otherwise would not be permissible. There are two different ways of looking at the problem which is a difficult one for the troops. We must study it

carefully, because pink cards are also issued to American service men. They are not bound to carry them as our service men are, nor are they subject to our courts as our service men are.
There have been some recent incidents in Northern Ireland where it seems that the yellow card procedure has been completely ignored. I do not wish to develop that matter further, because those incidents are still before the courts. They are matters which cause anxiety.
I should like to deal with some of the discipline problems that arise from the visiting forces legislation. There has been an increase in the number of foreign forces. They are not subject to our common and civil law, as our armed forces are. That requires careful re-examination. I hope that that is something to which the Government can agree. It is time to re-examine the Visiting Forces Act 1952. It might be something for the Select Committee on Defence to study. It is a matter of contention. The British soldier is put at a disadvantage compared with a visiting soldier.
There are other interesting discipline matters. There is the strange position whereby the mark 19 automatic grenade launcher, which can fire a ball of steel through an inch of steel at two miles at 350 rounds a minute, is being deployed at Greenham common. The Under-Secretary has said that it is a standard infantry weapon for use against armed attack. We have been told, however, that our troops, subject to our discipline, are responsible for the perimeter fence at Greenham common, and Molesworth. We have had the spelendid example of the Secretary of State wearing his first and only battle honour on his flak jacket at Molesworth.
There is the problem of the use of those automatic grenade launchers by the United States army. Why do they have 19 of them at Greenham common? If they must be there, why are they not controlled by and under the discipline of the British armed forces? They are infantry weapons to be used against armed attack, but who are they going to be used against?

Mr. Bruce George: I appreciate my hon. Friend's anxiety. Although he may be opposed to the siting of cruise missiles in this country, is he not reassured that if anyone tries to raid or gain control of those nuclear weapons, such as the Spetsnatz, about whom we have heard a great deal, they can be repelled? Would he like to see the boy scouts guarding nuclear establishments? Whether or not one agrees with nuclear weapons and cruise missiles, it is important that if sensitive nuclear weapons are potentially available to terrorists or a major enemy, I find it reassuring — that they are properly guarded.

Mr. McNamara: The Front Bench is always grateful for my hon. Friend's support on these matters. The issue is who controls those weapons. I was going on to argue, had my hon. Friend let me continue — in my usual courteous way I was prepared to give way the moment that my hon. Friend raised himself to this feet—about from whom those weapons were going to protect us. They will not protect us from an airborne attack or from the special manoeuvre group troops. The only people from whom they can protect us are the Greenham women.
I see no reason why those arms should be in the hands of American personnel who have no responsibility for the defence of the perimeter rather than in the hands of the


British Army or the Royal Air Force regiment. That means that we have no control over them. We want to know why they are there and why 19 of them are needed with a capacity of 350 rounds per minute, which rounds are capable of going through an inch of steel at two miles. If I lived in any of the surrounding villages I should be a good deal more worried, consciously at any rate, about those weapons getting into the wrong hands than about the cruise missiles getting into the wrong hands.

Mr. Deputy Speaker (Sir Paul Dean): Order. I think that the hon. Gentleman is straying somewhat from the motion, which relates to terms of service, discipline and punishment in the armed forces.

Mr. McNamara: I was considering the discipline to be applied and the distinction between United States and British personnel in the use of these weapons. Why are they treated differently not just in terms of the orange card but in terms of the weapons issued to them?
At the time of the increase in wages and the cut in overseas allowances, the Government were criticised for being more interested in money and efficiency than in man management and contented forces. The Ministry of Defence responded to that criticism by claiming that a parcel of measures designed to improve terms and conditions of service, living conditions and general morale had been knocked on the head by the Treasury. The Daily Telegraph stated:
A package of improved 'conditions of service', strongly advocated by the Defence Ministry, has been under protracted and sterile negotiation with the Treasury.
In failing to implement any of these measures, along with the pay increases, the Government lost a major chance to show goodwill.
We are prepared to support the Government in showing good will to the armed forces. We should therefore be happy to know what was in that package to which the Treasury took such exception. What was in the package which made it impossible for the Treasury to agree to such a gesture of good will? If the Minister will tell us, we shall be happy to support him in fighting the Treasury to obtain that package for our armed services.
It may be, of course, that there was never any such package and that the claim was no more than a smokescreen put up by the Ministry of Defence to defend itself against accusations from all parts of the House that morale in the forces was very low indeed, as those of us who have visited them know.

Dr. Alan Glyn: I am pleased to follow the hon. Member for Kingston upon Hull, North (Mr. McNamara), as I know that in his heart he is a great supporter of our armed forces and all our service capabilities.
I was interested to hear the hon. Gentleman's comments about the loss of documents. We must all be concerned about any possible leakage. I am sure that my hon. Friend the Minister agrees that any such loss, no matter how small, must always be treated as a very serious matter. However apparently insignificant a document may be, it could nevertheless be of value to the enemy in piecing together the jigsaw.
I do not agree with the hon. Gentleman that the services should indulge in political activities. They should remain

aloof from politics and serve the Government, be it a Conservative, a Labour or any other Government, and not meddle in politics. I agree with the hon. Gentleman that the legal position of the orange card ought to be defined. I do not know what power it confers. Perhaps my hon. Friend the Minister of State for the Armed Forces could tell us.
I know that the hon. Gentleman's party is worried about the role of the visiting forces, but the important question is not who owns but who protects the cruise missiles. The hon. Gentleman put his finger right on the matter when he asked who is responsible for guarding them. I am not concerned about the niceties of the position of visiting forces but about whether we are sufficiently cognisant of the responsibility that is placed upon us to ensure that those weapons are properly guarded and are not activated without our authority. It is a very grave responsibility.
I welcome the hon. Gentleman's remarks about SSAFA's centenary. It renders a unique service to service men and to their families. The whole House is united in the hope that SSAFA will continue its good work for another century. It does not seek publicity, but it is always there to provide a service, and service men acknowledge its value.
As for service discipline, it has never been higher. The hon. Gentleman referred to the 8 per cent. of service men who have left the Armed Forces, but that does not affect discipline, or the service that they render. Service discipline remains intact.
I welcome my hon. Friend the Minister of State's reference to young offenders. We realise that these young people face great difficulties. I welcome also the attack upon drug abuse by the Ministry of Defence. I think that alcohol abuse could also be a problem in the future, and I am glad that my hon. Friend said that this problem is already being tackled.
The hon. Member for Kingston upon Hull, North referred to the loss of the service man's overseas allowance. The Government may be open to criticism because the commanding officers were not given sufficient time to put this over to the men under their command. Perhaps we may be guilty, but nothing in life is perfect.

Mr. McNamara: I was not suggesting that the fact that the commanding officers did not have the opportunity to put it across properly meant that the matter was justifiable or that that was a suitable excuse. I was arguing that it was wrong for the Minister to advance that as a reason why it was taken so badly. I was simply saying that a wage cut is a wage cut, and that was the way it was faced.

Dr. Glyn: Perhaps I misunderstood the hon. Gentleman, but I am sure that my hon. Friend will answer that point. I apologise if I did misinterpret the hon. Gentleman. I thought he expressed the view that I take—that this was looked upon as a cut and that adequate notice was not given to commanding officers to explain the situation. I am sure my hon. Friend will touch on that important point which affects army discipline.
I note what was said about the Disabled Trust. We ought to have done this many years ago, and I welcome any movement in that direction.
The hon. Member for Kingston upon Hull, North mentioned the rebuilding of the barracks. I also represent a garrison town, and I have a particular interest in the rebuilding of Victoria barracks, Windsor.
I know that the Government are doing everything they can to speed this up. I appreciate that there are certain difficulties, but it is not on for soldiers to change in a barracks and then to go on parade. If our soldiers are to perform the functions required of them in Windsor, it is important that those barracks are rebuilt as swiftly as possible. There are technical difficulties which the Government must overcome — for example, there are great problems with regard to the Property Services Agency — but this rebuilding should take place at the earliest possible moment. I have had tremendous co-operation from my hon. Friend's Department. I hope that will continue so that we can ensure that the barracks are rebuilt.
This is a discipline matter, because the conditions under which our soldiers are asked to operate will in the long term affect the desire of people to serve in the brigade.
I welcome many of the things said by my hon. Friend and reiterated by the hon. Member for Kingston upon Hull, North. Never before in the history of our nation have our services been called upon to play such a difficult role, under difficult conditions, in so many parts of the world. That involves the use of sophisticated weapons, and our forces are discharging those duties with great distinction. I wish them well in the future.

11 pm

Dr. Norman A. Godman: My practical experience of military discipline is severely dated. It is many years since I served with the Royal Military Police, but, like many hon. Members, I continue to take an interest in the wellbeing and welfare of the personnel of the armed forces.
Like the hon. Member for Windsor and Maidenhead (Dr. Glyn), I am concerned about alcohol abuse, but I was somewhat reassured by what the Minister said about this form of addiction. I believe I am right in saying that the Minister's Department has statistics which detail the number of members of the armed forces who have been proceeded against for offences relating to drug abuse. The Minister may also have statistics of those who have been dismissed from the services because of drug abuse. Does the Minister's Department have any statistics of those who have been proceeded against or dismissed from the services for alcohol abuse or offences brought about by alcohol abuse?
I, too, welcome the involvement of the professional welfare officers employed by SSAFA to deal with what with in civilian circumstances one would call social background reports. These welfare officers, in some instances, have to work with social work departments and other civilian agencies. It certainly is a step forward.
If we have highly efficient disciplinary procedures, it is essential that we also have a humane grievance procedure, which I believe in the main we have in the armed forces. I wish to ask the Minister about the counselling that members of the armed forces receive when, perhaps for medical reasons, they have to leave the forces unexpectedly early. Had it not been for the absence of my secretary—and and it was not without leave—the Minister would have received a letter today concerning a constituency case. A letter is on the way to the Minister.
A young lad in my constituency who was serving with the Parachute Regiment was dismissed from the forces because of a medical complaint. This confused, bewildered young man came to my surgery last week, wondering what he could now do in civilian life. From what he said to me under my questioning, and with my military experience, albeit outdated, I was left with the impression that this young man had not received much counselling or, if he had, that it was of the most perfunctory kind. If that is the case—and, in fairness to the Minister, he does not have the details yet—it is a matter of deep regret.
We need an effective disciplinary code for those who serve in the forces. At the same time, a human grievance procedure is required. As part of that procedure—and I define the word grievance widely, with which I think the Minister will agree—it is important that those who have to leave the armed forces unexpectedly early and involuntarily should be afforded the courtesy of effective and humane counselling in order the better to equip them for the changed circumstances with which they are faced.

Mr. Stanley: With permission, Mr. Deputy Speaker, I shall reply to the comments that have been made during this brief debate.
The hon. Member for Kingston upon Hull, North (Mr. McNamara) devoted much of his speech to comments on

morale in the services. I do not in any way contest his comment that, over the past two years, there has been an increase in outflow from the services and in the number who are exercising their right to premature voluntary exit. I must repeat the points that I made in the recent debate on the Defence Estimates. That increase has taken place from a record low level over the past 10 years. The rate of premature voluntary exit from the services is barely more than half the rate during the last two years of the previous Government when it was at an all-time high for the previous 10 years. The position now is altogether much more healthy than at the end of the period of the last Administration.
This Government, unlike their predecessors, have a good record in fulfilling the recommendations of the Armed Services Pay Review Body. We have not allowed service pay to fall behind those recommendations in the way that was done under the previous Administration. We believe that, whatever the disappointment that those in Germany felt about the last LOA review, our service men and women in Britain and overseas are confident that in the present Government they have a Government who, are trying to give service men and women a fair deal in relation to the recommendations of the independent Armed Services Pay Review Body.
I understand the degree of disappointment that was felt when the LOA settlement was announced, but I must repeat what I have said previously: the LOA system operated by the present Government is, in essence, exactly the same system as was operated by our predecessors. It is a system to give compensation for the differences in the cost of living between this country and the places overseas where our service men and women are asked to serve. Where that cost differential narrows, it is inevitable and inescapable that there will be reductions in LOA, just as where there are widenings in that disparity, it is inevitable and inescapable that LOA will be increased. I must stress that in the same cycle of reviews in which LOA in Germany went down, in many other places it increased. That was very much welcomed by the service men concerned.
I refer the House to the full and excellent description that was given of the reasons for the last results of the LOA review in Germany by my hon. Friend the Under-Secretary of State for Defence Procurement in his reply to the Adjournment debate on 20 May.

Dr. Glyn: We all understood the reasons on 20 May. The reason why an earlier announcement was not given to the commanding officers has not been explained. It is difficult for soldiers to understand the complexity of these arrangements. When LOA increases, they are delighted. When it decreases, they are disappointed. The reasons for the fluctuations have been well set out, but why were the commanding officers not given longer notice to explain to their men exactly why this settlement had to take place?

Mr. Stanley: I accept my hon. Friend's point. We shall look again at the mechanics of the way in which the results of LOA reviews are made public. In an area as large as Germany, there are large numbers of units and at any one time many men are out of the barracks training, and so on. Immediately the LOA result is posted on unit notice boards, the announcement goes public over the British forces broadcasting network in Germany and, naturally, becomes an immediate subject of interest to the media. It


is inevitable, because on the day the notice is posted there will be many people out of barracks on exercises, and so on, that quite a number of them will hear through the instantaneous media, but I take my hon. Friend's point. I have looked very closely at how that particular announcement was handled this year and as and when the next LOA review takes place we will see whether there are lessons to be learned.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) referred to my comment about the attack we are making on drug abuse. He asked whether the new group is going to concentrate on hard drugs. The remit of the group is to look at all drugs right across the board—hard and soft, and solvent abuse as well. As part of the close attention which we are paying to this subject, we are refining and somewhat extending our statistical work and seeking to provide ourselves with better centrally held information on the types of drugs that are abused so that we have a proper, informed basis for further work and have details of the types of drugs that appear to be the main threat.
The hon. Member for Kingston upon Hull, North also referred to the question of the rules of engagement cards. I cannot agree with the construction that he put on the cards in use by service men in the United Kingdom. The cards follow basically the same policy as has been followed for many years by successive Governments, and are wholly consistent with the policy of minimum force which successive Governments have accepted. The Select Committee on Defence has recently carried out a very rigorous and detailed study of the security of military installations in the United Kingdom. It has had copies of the rules of engagement cards and evaluated them very closely. Its conclusions on these cards certainly did not in any way bear out the construction which the hon. Member placed upon them.
The hon. Member referred also to the Visiting Forces Act 1952, as did my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn). There, too, I felt that the construction which he placed upon that legislation was seriously at variance with the legal reality. The suggestion that United States service men are wholly outside the ambit of the process of law in this country is simply incorrect. I would refer him to an excellent and definitive description of the legal construction that should be put on the Visiting Forces Act that was given by my hon. Friend the Under-Secretary of State for the Home Department in the detailed speech which he made on 19 December 1983. It would be well worth while those interested in that legislation referring to that speech.
I would remind the hon. Member that the Visiting Forces Act which applies to our own country reflects an agreement between the members of NATO, a number of whom agree to have the forces of other countries stationed on their soil—not least, of course, ourselves. The legal position that United States service men enjoy in this country is in broad terms exactly the same as that which our own service men enjoy in Germany. That is something with which we are entirely content.
I would like to endorse the comments which my hon. Friend the Member for Windsor and Maidenhead made

about the very demanding tasks that are placed upon members of the armed forces and the very creditable way in which they carry out those tasks.
My hon. Friend also referred, as did the hon. Member for Kingston upon Hull, North, to certain incidents involving the loss of documents. I assure the House that the loss of any classified document, whatever the level of classification, is a matter of concern that is always investigated in great detail, and we do our best to seek the lessons that are to be learnt.
In the size of the organisation that the Ministry of Defence runs, the weight and volume of such documentation is enormous. For the transit of that documentation, we are in many cases dependent on the services of others who, by and large, work well for us. The hon. Member for Kingston upon Hull, North referred to some classified documents falling off a lorry. In fact, they fell off a post office van. That is being investigated carefully by the post office, and the lessons in that case will have been learnt.
I was sorry that the hon. Member for Kingston upon Hull, North chose to jump to instant conclusions, and to make his remarks on the record, about a report that appeared in the newspapers today about the loss of a classified document from the home of a particular senior officer. The hon. Gentleman, without informing himself properly of the facts, said that that officer should be disciplined.
I wish to make it clear that the officer concerned suffered a burglary of his home in which he lost a considerable number of personal possessions — the House will feel sympathy with him over that—and I am advised that only one document of the lowest possible restricted level of classification was taken. That one document was held in his home perfectly properly and correctly, under the normal rules, by the officer concerned. Therefore, the suggestions that the hon. Gentleman made were without foundation, and I am pleased to put that on the record.
This has been a useful and wide-ranging debate, and I hope that the House will now feel it possible to reach a conclusion on the order.

Question put and agreed to.

Resolved,
That the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 1985, which was laid before this House on 11th June, be approved.

EDUCATION

Motion made and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &amp;c.)

That the draft Education Support Grants (Amendment) Regulations 1985, which were laid before this House on 23rd May, be approved.—[Mr. Peter Lloyd.]

Question agreed to.

ANIMALS

Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &amp;c.)

That the draft Deer (Firearms etc.) (Scotland) Order 1985, which was laid before this House on 3rd June, be approved.—[Mr. Peter Lloyd.]

Question agreed to.

Fairground Safety

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

Mr. Piers Merchant: I am grateful for the opportunity to raise the subject of fairground safety.
This has become a matter of wide public concern. It is of direct concern to every parent, for while every child loves a fairground, regrettably, every child is also a potential victim of tragic accident.
It is a matter of concern to Government, too, in framing safety requirements under the law, and I take this opportunity to compliment the Minister and his predecessor on the keen and positive interest that they have shown in this area of safety. I know that the Minister intends to keep the whole matter under review, and I hope that he will give serious consideration to the continuing concern of myself and many others. The subject is equally of interest to many right hon. and hon. Members, many of whom have had to deal with the aftermath of tragedy in their constituencies. I am particularly pleased to see my hon. Friend the Member for Chichester (Mr. Nelson) here, because I know that he has a particular interest in the subject, and I understand that he generally thinks along the same lines as me.
I congratulate the Health and Safety Executive and its team of inspectors on stepping up their work on fairground safety, particularly on the thorough work that they did this week at the Newcastle Hoppings, about which I shall say more in a moment. I recognise, too, that the showmen involved have a vested interest in safety. Of course, they do not want accidents on their rides. They want to entertain, not cause misery. They want credibility, not public boycott. And naturally, they want to earn their living.
The Showmen's Guild of Great Britain has shown an admirably positive attitude towards safety. Together with the Health and Safety Executive, it has within the past year, implemented the new safety code, and is carrying out a valuable self-policing role. I pay a particular compliment to the Showmen's Guild national president, Mr. Whiteleg, who earlier this week travelled to Newcastle to meet me at the Hoppings so that we could together tour the site and examine safety in practice. We saw the log books that are now being kept by operators under the voluntary code of practice. We looked at the machines that were being run and at the safety measures that were recently introduced to make the various items of machinery more effective. Mr. Whiteleg is a genuine man, with honest purpose. If all showmen were as reliable, there would be fewer acccidents, and the voluntary code could be relied upon to be 100 per cent. successful.
Unfortunately, however, not all the showmen are as honourable as Mr. Whiteleg. Let me quote the words of Mr. Rodney Harrison, managing director of Harrison Brothers Amusements, who comes from the north-west of England. In an interview earlier this year he said:
It's time somebody spilt the beans on a small rotten core within the industry. A few of them are getting away with murder under the present system of inspection. Faulty machines are camouflaged. I've done it, everyone's done it. I know for a fact that when the inspector arrives to check the safety of a fairground half the rides have parts missing, but if the inspector can't see inside the mechanism of a ride then he can't check it properly.

There are lots of good people in the business but the rotten core, perhaps 5 or 7 per cent., have their activities covered up.
This week, in the centre of my constituency, on a 26-acre site on Newcastle town moor, has gathered Europe's largest travelling fair, known locally as the Hoppings. I welcome the fair. I welcome the fun and enjoyment that it will give to many in my area whose daily lives may be dreary and dull. I welcome the business that it brings to the many small businesses that have shows, rides and stalls, many of them local, others travelling from a distance. I am glad that this year has been largely accident-free.
Last year a 17-year-old girl, Julie Pearce, was trapped by her foot on the Superloop, a huge contraption that sends cars at incredible speed up to 60 ft or 70 ft above the ground and then down again. She was swung round by that machine and eventually flung out, falling 60 ft from the top to the ground. She is still in hospital 12 months later, having suffered multiple injuries. I am glad that she is now fast on the mend. It is a miracle that her life was spared.
Four weeks ago there was another accident in the northeast. A few miles from the Hoppings is the Spanish city at Whitley Bay on the coast. There a 12-year-old-girl was killed and three others injured when the bolts on the safety harness of a machine called the twister sheared off. On 2 June this year, six people were hurt, two seriously, at Wolverhampton when the phantom chaser collapsed. On 6 May 19 were hurt, 14 treated in hospital, all children, when the chairoplane went wrong at a fairground at Felixstowe. On 27 April this year 17 were hurt, all aged between 11 and 16, at Dover when the "lifting paratrooper" collapsed. These are all fairly major incidents that have happened in the past three months.
In the past five years, according to the reply given to me by my hon. Friend the Under-Secretary, accidents causing major injury have trebled—from 13 in 1980, there were 20 in 1981, 23 in 1982, 28 in 1983 and 38 in 1984—a constant increase year on year. Over the past eight years, 25 deaths, 158 major accidents and 283 minor injuries have been recorded.
These figures do not show everything. They do not catalogue all the minor injuries and near misses. I shall quote a letter that I received this morning from a concerned mother:
On Monday this week I went with some members of my family to the Hoppings on Newcastle Town Moor, and I accompanied my 3½-year-old son on the dodgem cars. A notice asked customers to ensure that children wore the safety belts attached to the car … I made quite certain Tim was wearing his properly. Unfortunately it wasn't enough to prevent a really rather nasty bump to his head, when our car and another collided. Tim was jolted forward and his forehead banged against the steering wheel. He cried for some time from pain and fright, and we got first aid from the St. John Ambulance on the site, but I'm glad to say it comes under the heading of 'minor injuries'. What concerns me, however, is that I feel it could have been avoided. The belt was not adjustable to take into account the quite marked variation in sizes and ages of children, and it was the great degree of slack left in the belt that allowed Tim to be virtually unrestrained in it.
As a mother of three children, I know bumps and scrapes are part of childhood, and I know parents have responsibilities themselves to assess risks and hazards. However, with regard to dodgems (a tremendous favourite with even very young children of three and four) I feel that belts should be adjustable, or parents should somehow be informed of the risks involved to small children whose heads are level with the steering wheel. I hesitate to suggest 'no under-fives allowed', but I wonder if we were lucky in Tim escaping with only a painful bump. How common are broken noses, jaws, teeth and so on?


One can tell from the tone of that letter that the writer is a responsible mother, and not prone to exaggeration or undue concern. One is aware that in this accident the bump was minor, but head injuries, by their nature, can easily become serious injuries. She makes a valuable point about safety instructions and gaps that still exist in safety procedure.
I hope that the examples that I have given illustrate the severity of the still remaining problem. I have said that the Health and Safety Executive has tried hard to tackle the problem within the existing framework of the law. It now has the voluntary code of practice that has recently become applicable. It is also carrying out more inspections than ever before.
However, the executive faces a number of problems. First, the law is vague. The Health and Safety at Work Etc Act is so general when it comes to applications to fairground sites that it is often extremely difficult to secure a prosecution. Both the law and the voluntary code lack teeth. Then there is also the pressure of time and work on the executive. The factory inspectors did better than ever before in the last year, but they were still able to carry out visits—single visits normally—to only 25 per cent. of fairgrounds. To put it the other way round, three quarters of all fairgrounds were not visited.
Under the law, there are no mandatory requirements for the Health and Safety Executive to inspect at regular intervals. There are no clear, defined legal requirements on safety harnesses, how they should be contructed, where they should be sited. There are not sufficient legal requirements on designers and manufacturers, on testing of equipment before it comes into service or on giving a type approval to new fairground machinery, often the source of the accident statistics.
The fact remains that the absolute duties under the Health and Safety at Work Etc Act that apply to a factory do not apply in the same way to fairground sites. Fairground sites nevertheless attract many children and the atmosphere is much riskier than the workplace or factory.
Even under the voluntary code, doubts have arisen about the nature of inspections and sometimes about the type of inspector selected. Because the code is voluntary and the onus is on the machine operator or fairground to choose the inspector, there are cases of inspections being done by people with few qualifications in machinery and engineering.
There are obvious shortcomings with safety harnesses. On Monday, when I visited the Hoppings with my 15-month-old daughter, I was encouraged to get on a rocket-shaped vehicle that goes round in a circle and goes up in the air when the passenger pulls a lever. It is a fairly old machine—I remember going on it when I was a child. It has an open cockpit out of which it would be extremely easy to fall, especially for a youngster who was in the wrong position while whirling around. As it moves fairly high above the ground, someone who fell out at speed could suffer serious injury. There was no safety harness in the machine and the operator was not aware of any safety risk. That shows that there is a long way to go on educating machine owners and operators.
The partnership between the Health and Safety Executive and the Showmen's Guild of Great Britain has operated well, but it could be developed so that there is a closer partnership because, ultimately, self-policing is the best answer. There must be a clearer framework for education into better attitudes and more awareness of

safety so that showmen, who are brought up in a rather free atmosphere can be persuaded to think more in teens of safety requirements such as are found elsewhere.
We must give the law more teeth in regard to inspections, their frequency and who does them. There should be safety harnesses and we should consider type approval of machinery at the design stage. Such matters cannot be left to voluntary good practice. I hope that I would be the last person to encourage unnecessary laws, but legislation must be considered in this context. I hope that my hon. Friend the Minister will investigate that possibility and that change might be made by simple amendment, perhaps to the Health and Safety at Work Etc Act 1974, setting out responsibilities for showmen at fairgrounds.
I know that my hon. Friend the Minister is also worried about fairground safety and that everyone who is involved in what is now a sensitive area wants to do what is best for children, who need watertight protection from risk, for owners and operators and for the general public, as we are all involved with fairgrounds at some stage. I am confident that my hon. Friend will keep the matter under review and I hope that he will find it possible to tighten up present requirements. I look forward to hearing his response.

The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley): It is a convention when Ministers reply to Adjournment debates to congratulate the Member who initiated the debate. In this instance, I congratulate sincerely my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) on bringing the subject of the debate before the House and on the constructive way in which he has described what has been done. He has described some of the failings, which are clear, and made some useful suggestions for my consideration and that of the Health and Safety Executive and the Health and Safety Commission.
I pay a special tribute to my hon. Friend for the way in which he has done his homework, as it were, and for having taken the trouble to give the Showmen's Guild of Great Britain the chance to discuss with him what has been done.
I realise fully that every accident has its impact on the families concerned. Without reciting a list of accidents, I hope that my hon. Friend will convey my best wishes to Julie Pearce and others who have been injured, and their families, this year and in the past as a result of regrettable incidents.
I speak with considerable feeling on this subject because I take seriously health and safety issues and for two other reasons. First, I look for every opportunity to emphasise that safety needs to be built into operations and not merely bolted on afterwards. Secondly, during my Easter and summer holidays as a student I used to work at Battersea funfair. I was not involved with the passenger-carrying rides and I do not think that I would qualify for membership of the Showmen's guild, but I have had experience of working with those who provide so much entertainment for so many. I hope that they continue to earn a good living by providing safe amusement for those who visit fairs, whether fixed or travelling.
I invite my hon. Friend to have further discussions with the Health and Safety Executive. Some of his suggestions


are technical ones, and I should prefer not to make an off-the-cuff reply. It is important that they are given proper consideration and that interest and expertise is shared with my hon. Friend. I do not want to give my hon. Friend much hope that there will be an immediate change in the law. I am not saying that everything is satisfactory but I consider the framework to be so.
The House will know that the Health and Safety at Work Etc. Act 1974 was designed to avoid constantly changing the law on which it impinged. Instead, its aim was to impose overall duties. I shall quote from the foreword of the code of safe practice at fairs. It states that although the code does not itself have the force of either law or an approved code of practice, the Health and Safety Executive has instructed its inspectors to take it into account when considering whether there is compliance with statutory requirements. Failure to follow the guidance or other equally effective measures may lead to action by inspectors ranging from advice and warnings to the issuing of enforcement notices or even prosecutions, although ultimately it is for a court or tribunal to decide whether there has been compliance with the law.
I draw the attention of the House to appendix 1 on legal obligations, which spells out the parts of the Health and Safety at Work Etc. Act which apply. It refers to section 2, which is the general duty of employers to employees. Section 3 is concerned with the general duties of employers to persons other than their employees. Section 4 relates to the general duties of a person connected with premises. I commend the entire code to the House. I know that other hon. Members are interested in this issue and my hon. Friend drew attention to the presence of my hon. Friend the Member for Chichester (Mr. Nelson). I know that there are others who would wish to be here.
The experience of the new code of practice will determine whether there should be more law. Any one who has read it, or the guidance notes produced by the Health and Safety Executive on the "Octopus" and "Waltzer" rides, will have seen that practical experience is being used in drawing up the requirements. Anyone who believes that to ignore the code of practice or the guidance notes will leave him free from prosecution if he does something wrong or allows a dangerous position to develop, is wrong.
Fairs have a great part to play, and it is only during the past 10 years that they have come under formal health and safety controls. I, too, pay tribute to the trade associations which are powerful in the industry and which have co-operated in bringing the code of practice into operation. They and anyone who studies the industry will realise the difficult nature of the industry in that little equipment is standardised, there is a great variety of rides, and there is often little supporting literature.
Accident levels had shown the need for something tougher than the previous Home Office guidelines, which came into effect after the tragic major accident at Battersea fun fair in 1972. After the various sections of the industry and the health and safety experts were brought together, the code of practice was produced to provide something more explicit about the responsibilities. The Health and Safety Executive recognised that, if trade associations were able to contribute their expertise and if they supported the code, enduring improvements to fairground safety would be more likely. The code was published in

1984, and provides a comprehensive statement on what fairground safety requires. I emphasise that it incorporates the best known practice in the industry.
My hon. Friend mentioned statistics. There is little doubt about the number of deaths and major injuries. We are likely to have had far better reporting of the number of incidents and minor injuries during the past few years than previously. The industry's co-operation has provided more encouragement to people to declare what has been happening. I know from talking to inspectors that part of the reporting mechanism, where the Health and Safety Executive is advised of an incident which may recur on the same sort of equipment elsewhere, makes it possible to take unsafe machinery out of operation until modifications have been made or until it has been checked to see whether the ride can be operated safely.
At the launch of the code my predecessor and the chairman of the Health and Safety Commission said that compliance with the code's provisions would be monitored closely and enforced where necessary. The Health and Safety Executive organised an extensive programme of visits to fairs to publicise and explain the code's provisions. It has gone on increasingly to enforce them. Many operators have made significant improvements to rides as a direct result of the code, and have prevented what otherwise could have been serious injuries to passengers.
I shall now deal with enforcement last year. The code was used without difficulty in serving 28 prohibition notices and 17 improvement notices from April 1984 onwards. The code has also been used as the basis for prosecutions under the Health and Safety at Work Etc. Act over breaches of its provisions. The precise legal nature of the code is not necessarily as important as the fact that it is a practical back-up to the Health and Safety at Work Etc. Act.
I wish to turn to a specific point which my hon. Friend made, which is the issue of safety belts and harnesses. I am advised that they are manufactured to British standard specifications, which is a high and recognised standard. Wherever possible, reference to them is incorporated in the guidance notes and recommendations. However, my hon. Friend raised an important point on the age of those involved in some rides and amusements. That is a matter on which I shall seek advice, and I shall write to him with details, if he has not already obtained information directly from the executive.
It is generally recognised that the code has been taken seriously not only by many fairground operators but by nearly all of them. If people do not take it seriously, they will be in breach of the code and will be liable to prosecution under the Act. If anyone knows of people who are wantonly disregarding the requirements of safety, he has no obligation to speak in general terms but instead to put in a report. It is the same as seeing people doing other dangerous things in other circumstances. There is a general community responsibility.
The code has attracted much international interest. The United States, Canada and European countries have recognised that the United Kingdom is the first country to produce a comprehensive code setting out detailed objectives for fairgrounds.
My hon. Friend drew attention to some of the sad and tragic accidents that have happened this year. We shall have to wait until the end of the year to get the full picture, but I assure him that, whenever a serious accident


happens, it is examined, and that the results of that examination will be shared with and, if necessary, imposed upon the industry. I do not wish to sound as though I am saying that the Health and Safety Executive is against the industry. Only with co-operation can we have safety built in, not just bolted on.
I should emphasise what the regulations require. There should be daily inspection by the operator, and a requirement that every amusement device should be thoroughly examined at least once every 14 months. That should also be done following any repair or modification likely to have affected the integrity of the device. Every newly constructed passenger-carrying device should be tested by subjecting it to the maximum strains. Existing rides should be tested within three years of the code coming into operation, and every new device should be

tested before it comes into operation. A log book should be kept to record all those tests and inspections, and a register must be kept which can be seen by the health and safety inspectorate. The role of the inspectorate is to investigate that those precautions have been taken. It is for the operator to determine whether the ride is safe.
In general, the principles in the code are sound and are being enforced by the Health and Safety Executive, with the back-up of the Health and Safety at Work Etc. Act. I look forward to following up this short debate with further parliamentary interest so that we can continue to ensure that amusements are as safe as is reasonably practicable and that people can enjoy themselves in safety.

Question put and agreed to.

Adjourned accordingly at thirteen minutes to Twelve o'clock.